BTC risks facing an extended pullback if it loses this level

Bitcoin has surged to a new all-time high, briefly breaching the $108,000 mark in an impulsive rally.

However, another rate cut by the Federal Reserve and some cautious comments unexpectedly led to a rejection, increasing the likelihood of a prolonged pullback.

Technical Analysis

By Shayan

The daily chart

Bitcoin recently hit a new all-time high of just over $108,000 after a powerful rally, breaking through the significant psychological resistance of $100,000 with a notable boost. However, the bullish momentum has since faded and the price is showing a sideways movement. A recent rate cut by the Federal Reserve unexpectedly triggered a jolt in the market, leading to a notable pullback from the $108,000 level.

This rejection, along with a bearish divergence in the RSI indicator, suggests the likelihood of a corrective pullback phase. The middle limit of the ascending channel, around $100,000, is expected to serve as a critical support zone. Buyers can take advantage of this level to re-enter the market, which could push the asset towards the $108,000 resistance region.

The 4 hour chart

On the 4-hour chart, BTC has shown signs of weakening bullish momentum and increased volatility by reaching the $108,000 resistance. The price has entered a phase of lateral consolidation, hinting at possible profit taking and distribution by market participants.

Bitcoin is currently trading within an ascending wedge pattern, often indicative of a short-term bearish reversal. A short correction or distribution phase near the $108,000 level seems likely in the near term. While the broader bullish trend remains intact, traders should exercise caution and avoid succumbing to FOMO.

If a deeper correction develops, the asset could find support within the 0.5-0.618 Fibonacci retracement levels, providing a foundation for the potential next stage of Bitcoin’s ongoing recovery.

Chain analysis

By Shayan

Long-term holders represent a critical segment of market participants, and tracking their behavior can provide valuable insight into future market trends. The Binary Coin Days Destroyed metric is a key tool for analyzing its activity. This metric assigns a value of 1 when Coin Days Destroyed by Supply (CDD) exceeds its average and 0 otherwise.

The attached chart illustrates the 30-day SMA of the binary CDD metric along with the price of Bitcoin. Spikes in this metric often indicate potential selling pressure from long-term holders, as historically large price declines have followed such increases.

Currently, the Binary CDD metric has seen a substantial increase, coinciding with Bitcoin’s recent achievement of a new all-time high of $108,000. This increase suggests that long-term holders may see this price level as an opportune time to distribute their assets, thus reducing their exposure to the market. If this selling pressure intensifies, it could contribute to greater volatility and a possible price correction.

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