Bitcoin has experienced a recent increase in demand near a crucial support level, leading to a slight bounce above the 200-day moving average at $59.2K. This movement suggests the potential for a bullish reversal if the price can hold above this key moving average.
Analyzing the daily chart of Bitcoin, we can see that after a period of bearish movement, Bitcoin dropped below the 200-day moving average at $59.2K, causing fear and uncertainty in the market. However, the cryptocurrency found strong support at the 0.5 Fibonacci level ($56K), resulting in a slight bullish rebound. The price has now climbed back above the 200-day moving average, indicating a possible bear trap.
Furthermore, a bullish divergence between the price and the RSI indicator hints at a potential bullish reversal in the short term. If Bitcoin can maintain its position above the 200-day moving average, we may see a bullish trend in the mid-term, with the next target being the 100-day moving average at $64.6K.
Looking at the 4-hour chart, Bitcoin was rejected near the upper boundary at $71K, leading to a bearish trend with lower lows and highs. However, the bearish momentum faded as Bitcoin reached the support region at $56K, resulting in a period of sideways consolidation. Subsequent buying activity sparked a slight bullish rebound, bringing Bitcoin to a critical resistance area around $60K. Here, the cryptocurrency faces selling pressure that could determine its next move towards the $65K mark or a return to the critical $56K support level.
In terms of on-chain analysis, monitoring miners’ profitability has been a useful tool for predicting market bottoms and the end of correction periods. Historical data shows that significant drops in miners’ profitability during bull cycles often precede substantial price increases for Bitcoin. Similar patterns were observed in 2016 and 2020, leading to strong upward trends in Bitcoin’s price.
As of 2024, a comparable decline in miners’ profitability has been identified, indicating a potential transition to a bull market despite uncertainty about the exact timing. This analysis suggests that the end of the current correction period may not be far off, setting the stage for a potential bullish trend in the near future.
In conclusion, Bitcoin’s recent price movements and on-chain data suggest the possibility of a bullish reversal in the coming weeks. Traders and investors should closely monitor key support and resistance levels to gauge the cryptocurrency’s next move in the volatile market environment.