Bitcoin’s price remains in a state of indecision, confined within a tight consolidation range bounded by the 100-day and 200-day moving averages.

An impending breakout from this range will likely determine the asset’s short-term direction.

Technical Analysis

By Shayan

The Daily Chart

Bitcoin has been stuck in a multi-month consolidation between the $55K-$71K price range since March 2024, with no clear trend or direction emerging.

This prolonged period of sideways movement indicates an overall equilibrium between buyers and sellers, with accumulation occurring at the lower end of the range and distribution at the top. Despite this, a bearish sign has recently appeared as Bitcoin broke below the 200-day moving average at $63.4K.

However, the downward momentum was halted upon reaching the 100-day moving average at $61K, where the price has since entered a phase of low-volatility consolidation.

Bitcoin is squeezed within a narrow range, constrained by the 100-day and 200-day moving averages. This suggests that an impending breakout could determine its short-term direction. A decisive move outside this range would likely signal the next major trend.

Source: TradingView

The 4-Hour Chart

On the 4-hour chart, an ascending wedge pattern has formed during the recent prolonged consolidation phase. The price has been oscillating between this wedges upper and lower boundaries, which typically points to a continuation of the initial bearish trend if it breaks downward.

Following increased selling pressure near the 0.786 Fibonacci OTE level, Bitcoin experienced a significant rejection, causing the price to cascade toward the wedge’s lower boundary.

BTC is consolidating after receiving support at this level, but sellers aim to break below the wedges lower trendline, which coincides with the $60K support region. Should this breakdown occur, the next critical target for Bitcoin will be the $58K support region.

Source: TradingView

On-chain Analysis

By Shayan

One key on-chain metric for understanding Bitcoin market behavior is the realized price UTXO age bands. This metric highlights the average price at which holders acquired their coins, broken down by how long they’ve held them.

Historically, the realized price in the 3-6 months (short-term) and 6-12 months (long-term) cohorts have served as critical support or resistance levels. When Bitcoin struggles to break above the average buy price of these groups, it often signifies a bearish trend. Conversely, if the cryptocurrency can break above this realized price, it suggests growing bullish momentum, as new buyers are willing to hold even at higher levels.

At present, Bitcoin’s price is hovering between the realized prices of these two groups:

$64K for the short-term holders (3-6 months) $55K for the long-term holders (6-12 months) Bitcoin recently surged toward the 3-6 month holders’ realized price of $64K, indicating a test of this key resistance level. A successful breakthrough above this level could signal upward momentum and potentially continue the bullish trend. However, if Bitcoin fails to break above this zone, it may suggest renewed selling pressure from short-term holders, leading to bearish retracements toward the $55K level.

Source: CryptoQuant SPECIAL OFFER (Sponsored) Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive $600 exclusive welcome offer on Binance (full details).

LIMITED OFFER 2024 at BYDFi Exchange: Up to $2,888 welcome reward, use this link to register and open a 100 USDT-M position for free!

Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.