Bitcoin Dropped Below $22,000 But Bulls May Prepare Another Push Up (BTC Price Analysis)

Bitcoin’s recent rally has boosted overall sentiment among market participants. This change of scene has sparked positive momentum across the industry as signs of a bull market begin to burst.

Technical Analysis

By Shayan

The daily chart

The $25,000 price region has been the most significant obstacle in Bitcoin’s path over the past eight months. Most recently, the price attempted to surpass this level and failed, leading to a consolidation correction phase.

However, after an impulsive surge, a corrective phase is essential for the rally to continue, which usually occurs concurrently with the formation of the pullbacks.

Therefore, the recent dip can be viewed as a corrective phase to form a pullback to the broken descending trend line, flush out overheated futures market positions and trigger another rise.

Still, the $21,000 price level and the 50-day moving average, which currently stands at $20.3,000, are the primary support levels and could act as the next target for the recent decline.

Source: TradingView

The 4 hour chart

On the 4-hour timeframe, the price started a slight downward move after being rejected by the substantial $25,000 resistance region and seizing sell stop orders below the minor $22.3,000 support level.

Typically, the price tends to grab sell stop orders below the support levels during corrective phases of an upmove before continuing higher.

Moreover, after the recent dip, the price has reached a significant support region consisting of the $21,000 support level and the crucial Fibonacci levels between 0.382 ($21,604) and 0.5 ($20,785).

As a result, BTC is facing significant support and appears to be starting another bullish move in the coming days.

Source: TradingView

On-Chain Analysis

From Edris

Bitcoin’s recent price rally has led many investors to believe that the bear market is finally over. Holders who have been submerged for the past few months are back in profit. However, there are still some warning signs as this surge could be another bull trap during the bear market.

This chart shows the short-term holders SOPR metric, which measures the ratio of profits made by market participants who have bought their coins over the past six months. Values ​​below one indicate losses, values ​​above one indicate realized gains.

After the rally over the past few weeks, the short-term holders who have accumulated BTC at lower average prices have realized their gains.

While profit-taking isn’t necessarily a negative sign, this metric has reached levels previously seen at the all-time high of $69,000. If this selling pressure does not match demand, the correction could continue.

Source: CryptoQuant
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Cryptocurrency charts from TradingView.

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