Bitcoin’s price has failed to keep up its upward momentum and has yet to set a new record high above the $75K level. Given the current price action, even a deeper correction is probable.
Technical Analysis
By TradingRage
The Daily Chart
On the daily chart, the price dropped below the $68K support level a few days ago. It has dropped back inside the large descending channel, making its recent breakout fake.
The $60K support level seems like a valid target for the upcoming weeks, and the 200-day moving average trending around the $56K mark can be the next target for the worst-case scenario.
Source: TradingView
The 4-Hour Chart
Looking at the 4-hour timeframe, things seem more apparent. The price has been forming an ascending channel pattern around the $70K resistance zone. Yet, the channel is getting broken to the downside, which is a classical bearish reversal indication.
Meanwhile, the RSI has entered the oversold region, pointing to a potential bear trap. Therefore, if the market quickly climbs back inside the channel, the bearish scenario would fail, and a bullish reversal could be expected.
Source: TradingView
On-Chain Analysis
By TradingRage
Exchange Reserve
While Bitcoin’s bullish momentum is seemingly fading, things are going strong in the background. This chart demonstrates the BTC exchange reserve metric, which measures the amount of Bitcoin held in exchange wallets.
A decline in exchange reserve typically shows dominating demand, while increases are associated with excessive supply.
The exchange reserve has been on a steep decline recently, significantly since the price recovered from the $60K level earlier in May. While the technicals do not favor a rally, the fundamentals of Bitcoin supply and demand seem strong and could lead to a price surge in the coming months.
Source: CryptoQuant
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Cryptocurrency charts by TradingView.
