Bitcoin is currently attempting to stabilize after a corrective move from the $92K region, with the price rebounding from the $80K support zone. Although this retracement offers a glimmer of hope for bullish momentum, the underlying market conditions illustrate that momentum remains fragile. It is crucial for bulls to secure a follow-through above key resistance levels to foster confidence in a sustainable recovery.
Technical Analysis
The Daily Chart
Analyzing the daily chart, Bitcoin (BTC) is trading just below its 200-day moving average following a breakdown from the $88K level. As the asset approaches the $80K support, it aligns with previous demand levels and horizontal structure, which have historically provided support. Nonetheless, the 200-day moving average, presently located around the $87K mark, is posing dynamic resistance, and the price has yet to establish a convincing close above this critical level.
The Relative Strength Index (RSI) continues to float below the 50% threshold, indicating some recovery potential. However, a strong bullish divergence is noticeably absent. Unless BTC reclaims the $92K level, the broader trend remains sideways-to-bearish in the short term.
The 4-Hour Chart
Turning to the 4-hour chart, BTC has recently broken down from a rising wedge formation, which contributed to the sharp decline from $89K to $80K. Since establishing a short-term bottom, the asset has bounced back toward the $84K–$85K region. The RSI shows a recovery from oversold conditions, edging toward mid-range indicators. This suggests a potential upward movement if momentum can be sustained. However, the price must successfully clear the former wedge support, which has now become resistance, and hold above $86K to pave the way for another run at $92K. Failure to achieve this could lead to a further decline, possibly revisiting the $80K threshold or dipping into the $75K zone below.
On-Chain Analysis
Short-Term Holder SOPR
Bitcoin’s Short-Term Holder SOPR has fallen below one again, indicating that numerous recent buyers are realizing losses on-chain. This development typically reflects weak short-term conviction, adding pressure to any potential rally. In the past, SOPR values under one during a downtrend are indicative of capitulation among short-term holders and are often observed near local bottoms, albeit only when followed by a decisive price rebound.
At present, this behavior suggests that the current bullish momentum lacks the necessary strength unless complemented by increased demand and a shift in market sentiment. Thus, investors should monitor for an SOPR reversal above one as a potential indicator of a healthier recovery.
The insights provided in this post are intended to foster a deeper understanding of the current state of Bitcoin as it navigates these market conditions. Stay tuned for further updates as the situation evolves.
