Bitcoin price is consolidating in a tight range as market participants are uncertain about the future price direction.
Technical Analysis
By TradingRage
The daily chart
On the daily chart, the price recently recovered from the $50,000 mark after falling well below the 200-day moving average. Currently, the market is consolidating below the moving average, which is around $63,000, and is failing to climb back above it.
Meanwhile, the $56,000 support level is currently holding the market and preventing the price from falling further. Therefore, a breakout from either this level or the 200-day moving average could determine the short-term price action of BTC and the crypto market.
The 4-hour chart
On the 4-hour time frame, the price has formed a bullish flag pattern following the recent recovery from the $50,000 zone.
Considering the price action within the flag pattern, it could only be a matter of time before the market breaks above it, which could lead to a rally towards the $64,000 resistance zone in the short term.
On the other hand, keep in mind that if the flag is broken to the downside, things could quickly get ugly.
On-Chain Analysis
By TradingRage
Bitcoin Short-Term Holders SOPR
While Bitcoin’s price performance has been quite volatile in recent months, an analysis of the investor situation can be insightful.
This chart shows the SOPR for short-term Bitcoin holders, which measures the overall ratio of profits (or losses) realized by short-term investors. Values above one indicate total profit realization, values below one indicate total loss realization.
As the chart shows, profit margins for short-term investors have been declining during the last few months of consolidation and they have even made losses in recent weeks. While this price drop is unfortunate, it could be a typical sign of a price bottom in the middle of a long-term bull market. However, this is not guaranteed as a variety of factors can affect price action in the near future.
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Cryptocurrency charts from TradingView.
