- The price of Bitcoin may experience a drop to the $25,000 support level.
- The Relative Strength Index indicates a possible correction.
Bitcoin price is showing sideways price movements between 30,000-30,500, what do the price chart and on-chain data say about Bitcoin?
Bitcoin Price Analysis – Daily Chart
On the daily time frame, Bitcoin’s price aggressively attacked the $30,000 resistance level, breaking out of the tight consolidation range around $28,000. This level is both a very important psychological and technical resistance area and will likely shape the short-term future of the crypto market.
A breakout could bring a rise towards the next significant resistance area at $38,000, while a rejection could lead to a drop towards the 50-day moving average at $26,000 and even the support area at $25,000.
BTC/USDT PERP Daily Price Chart
In either case, as long as the price stays above the 200-day moving average, which is an important bull/bear market indicator, bulls can still be optimistic.
Bitcoin Price Analysis – 4 Hour Chart
The 4-hour chart shows that the price is struggling to break the $30,000 resistance level after recovering from the $28,000 support area a few days ago.
The Relative Strength Index (RSI) indicator also shows a clear downward trend signal that could indicate a potential consolidation or correction in the short term.
In this case, while $28,000 is expected to support the price again, the $25,000 area could also be retested in the event of a deeper correction. As a result, there is no shortage of support levels and bulls can finally breathe a sigh of relief after almost a year of a terrible bear market environment.
Bitcoin On-Chain Analysis
Bitcoin’s price is constantly rising, and many investors who bought at prices below $30,000 are now making a profit. It is expected that these holders will now realize at least some of their profits, and the SOPR metric confirms this analysis.
The Spent Output Profit Ratio (SOPR) of short-term investors is a useful on-chain metric that measures the realized profit ratio of investors who bought crypto in the last six months. Values above 1 indicate profit-taking, while values below 1 are interpreted as investors selling their coins at a loss.
Bitcoin: Short-Term Investors
In the last few months, short-term investors who bought Bitcoin have aggressively made profits similar to the all-time high of $69,000. While realizing profits is a natural behavior in a bull market, if the supply is not met with sufficient demand, it could lead to a reversal of the downward trend and even a continuation of a bear market towards lower prices.
Therefore, this metric should be constantly monitored to determine whether the market is in the early stages of a new bull run or another bull trap.
