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Bitcoin’s price is finally showing some signs of recovery. The questions to now consider are whether the recent correction is over and if new all-time highs are still possible. Let’s dive in.
Technical Analysis
By TradingRage
The Daily Chart
On the daily chart, the price has been trending down since it failed to break above the $75K mark earlier in June. However, the $60K support level has so far proven to be solid, preventing it from dropping any lower.
Considering yesterday’s bullish candle, the market might be constructing a bottom near the $60K mark and could soon begin a new rally, igniting excitement and intrigue once again.
Yet, this scenario is only valid until the $60K support level and the 200-day moving average, located around the $58K mark, remain intact.
The 4-Hour Chart
The 4-hour chart also shows a positive development. The BTC price has been able to finally break above the bearish trendline which has been valid over the last month.
However, this can only be considered as the first step for a bullish reversal, as the price should keep above the trendline.
Moreover, the RSI is showing values above 50%, indicating that the momentum is finally bullish once again. So, as long as the price remains above the trendline and the $60K level, investors can be optimistic that the correction is over.
On-Chain Analysis
By TradingRage
Bitcoin Exchange Reserve
While Bitcoin’s price has seemingly found a bottom after weeks of bearish price action, analyzing on-chain metrics can yield beneficial insight into whether this is really the case.
This chart demonstrates the Bitcoin Exchange Reserve metric, which measures the amount of BTC held on exchange wallets. Increases show that investors are depositing their coins onto the exchanges for selling. On the other hand, drops in Exchange Reserve levels mean that holders are withdrawing their coins from the exchanges to keep in their personal wallets.
It is evident that the Exchange reserve metric has been rapidly declining over the past few months. Meanwhile, it has risen a little lately, showing that many investors have likely sold their coins at the later stages of the recent price drop.
While a rise in supply is never good for the price, it might point to a capitulation phase that mostly occurs at the end of bearish price moves. Therefore, if the Exchange Reserve metric returns to its decreasing trend, the market is likely to move to a new all-time high soon.
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Cryptocurrency charts by TradingView.
