Following Bitcoin’s Latest Correction, This is the Crucial Level it Must Hold (Price Analysis)

The price of Bitcoin is struggling to break through a significant level of resistance and is currently in a pullback after the last few red days on Wall Street. Is it just a short-term correction or the start of a new bearish phase?

Technical Analysis

From: Edris

The daily chart

During the intraday period, the price fell shortly after being rejected from the critical $25,000 level. The 50-day moving average around the $22,000 level would be the first likely support level, followed by the 200-day moving average around the $20,000 psychological support area.

If these dynamic support levels fail to hold, another decline towards the $18,000 level is imminent. However, if the price bounces off any of these levels, another retest and a potential breakout above the $25,000 resistance zone is highly likely.

The RSI indicator, which has signaled the recent rejection with a clear bearish divergence, is trending around the 50% line, showing the momentum balance on the daily timeframe.

The 4 hour chart

Analyzing the 4-hour chart, the price has declined from the $25,000 area after several rejections and is moving towards the $22,500 support level. A breakdown of this level would potentially lead to a deeper decline towards the $20,000 and even $18,000 levels in the coming weeks.

On the downside, the RSI is approaching the oversold zone during this period, which could result in a temporary recovery from the $22,500 level which could lead to a break above the $25,000 level.

A breakout of $25,000 would be followed by more bullish price action in the coming weeks and the bear market could finally be considered over from a technical perspective.

On-Chain Analysis

Bitcoin Miner Reserve

Bitcoin price has been rising lately and market sentiment is turning more positive. However, miners, a key group in the bitcoin market, have yet to show any bullish behavior.

The chart below shows the miner reserve metric, which measures the amount of BTC in miners’ wallets. This metric has been declining in recent months. Some miners eventually capitulate, others sell their BTC to provide liquidity and cover operating costs.

If this trend continues, selling pressure could flood the market with oversupply and lead to further price declines.