Bitcoin’s price has been moving within a narrow range in the past few weeks after breaking below the 50-day moving average. The current market situation presents several potential scenarios that could unfold. On the daily timeframe, Bitcoin’s price has yet to display a significant upward or downward movement. If a rally takes place in the upcoming weeks, the first resistance level to watch is the 50-day moving average, which is at around $28K, followed by the crucial $30K level.
On the other hand, for holders, the key support areas to rely on are the $25K level and the 200-day moving average, which is at around $23K. The RSI indicator remains below the 50% threshold without much movement, indicating the current bearish momentum and increasing the likelihood of a downward move in the short term. On the 4-hour chart, the price remains within a significant descending channel. Although there was a recent upward push prompted by the minor support level at $26K, there is still a strong possibility of a decline towards the lower boundary of the channel and the support area at $25K.
Conversely, for a rally to occur, the market must first break through the resistance level at $27,500. If this happens, the chances of a breakout above the channel and a subsequent retest of the resistance area at $30K would increase.
Miner Selling Pressure and On-Chain Metrics
While Bitcoin’s price has been relatively stagnant, examining on-chain metrics can help understand the underlying dynamics. The Bitcoin miner reserve metric quantifies the amount of BTC held by miners, a significant group within the ecosystem. The data illustrates a consistent decline in this metric over the past 9 months, indicating that miners have been selling their coins to cover operational expenses or mitigate risks in an uncertain macroeconomic climate.
This decline has intensified, signifying that miners are capitalizing on the recent price increase to sell their coins at a higher level. If this trend persists, a bearish reversal will likely occur in the near future. The continuous selling pressure from miners could result in an oversupply of bitcoins in the market, leading to a potential downtrend in price.
Bitcoin’s current market situation presents several potential scenarios that could unfold. On the one hand, a rally could occur if the market breaks through the resistance level at $27,500, leading to a potential retest of the resistance area at $30K. On the other hand, if miners continue to sell their coins, it could result in a bearish reversal and a potential downtrend in price. It is important to monitor both on-chain metrics and price movements to understand the underlying dynamics of the Bitcoin market.