2 Critical Levels to Watch for Bitcoin in the Short Term

The price of Bitcoin is consolidating in a tight range as market participants are uncertain about the future direction of the price.

Technical Analysis

By TradingRage

The daily chart

On the daily chart, the price has recently recovered from the $50,000 area, after the significant drop below the 200-day moving average. The market is currently consolidating below the moving average, which is around $63,000, unable to break above it again.

Meanwhile, the $56,000 support level is currently holding the market, preventing the price from falling further. Therefore, a break of this level or the 200-day moving average could determine the short-term price action of BTC and the crypto market.

Source: TradingView The 4-hour chart

Looking at the 4-hour time frame, the price has created a bullish flag pattern after the recent recovery from the $50,000 area.

Given the price action within the flag pattern, it could only be a matter of time before the market breaks it to the upside, which could lead to a rally towards the $64,000 resistance zone in the short term.

On the other hand, be aware that things could get ugly quickly if the flag breaks on the downside.

Source: TradingView On-Chain Analysis

By TradingRage

Short-term holders of Bitcoin SOPR

While Bitcoin price action has been quite choppy over the past few months, looking at what investors are going through can be insightful.

This chart presents the short-term Bitcoin holder SOPR, which measures the aggregate ratio of profits (or losses) made by short-term investors. Values ​​above one show aggregate profit realization, and values ​​below one indicate aggregate realized losses.

As the chart indicates, during the last few months of consolidation, short-term holders’ profit margins have been shrinking, and have even been realizing losses in recent weeks. While unfortunate, this jolt could be a typical sign of a low price in the middle of a long-term bull run. However, this is not guaranteed, as a wide range of factors can affect price behavior in the near future.

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