Bitcoin price has been recording lower highs and lows recently after a decisive turn away from the significant $48,000 level.
Investors are now wondering whether the upward trend is over or whether a new all-time high is still looming.
Technical analysis
By TradingRage
The daily chart
On the daily chart, the price has formed and broken below an ascending channel below the $48,000 resistance level. This is a corrective (or bearish) reversal pattern, especially in case the price does not rise again within the channel.
Currently, the $40,000 support zone is preventing the market from falling lower. However, with the Relative Strength Index reading below 50%, the likelihood of further decline is still significant.
It is worth noting that at the time of writing, the price of BTC has risen above $41,000 and is gaining momentum to challenge the $42,000 mark.
Source: TradingView
The 4 hour chart
The 4-hour time frame provides further clues about Bitcoin's potential short-term price movement. The cryptocurrency has recovered above the $40,000 mark and is on track to retest the broken trend line (the lower boundary of the broken ascending channel).
Should the price fail to break above, this would be a potential turning point that would push the price even lower in the coming weeks, possibly towards the $38,000 support level.
Source: TradingView
On-chain analysis
By TradingRage
Funding rates
In the final weeks of the recent uptrend, market participants were extremely confident that BTC would soon reach a new all-time high. This euphoric mood could have been one of the reasons for the decline in recent weeks.
This chart shows Bitcoin funding rates, one of the valuable metrics for assessing market sentiment going forward. The key figure indicates whether buyers or sellers execute their orders more aggressively overall. Positive values indicate optimistic market sentiment, while values below zero are associated with pessimism.
As can be seen from the chart, funding rates have reached extremely high levels during the recent peak. These levels were similar to those observed during the all-time high of $69,000. As a result, one could have expected a deep correction or even a bearish reversal as things continued to trend in the same way.
Source: CryptoQuant
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Cryptocurrency charts from TradingView.
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