In this article, we analyze Bitcoin’s recent breakout and predict whether it will reach $30K or face a correction. The current market conditions and technical indicators are taken into consideration to provide a comprehensive BTC price analysis. Read on to find out what to expect from the world’s largest cryptocurrency in the coming days.
Bitcoin Price Breaks Above Key Resistance Level, but Bear Market Not Over Yet
Bitcoin’s recent price rally has been fueled by a break above a significant resistance level. However, the bear market that has been ongoing since 2022 is not considered over until another critical level is broken to the upside.
On the daily chart, Bitcoin has seen a significant uptrend over the past week. The price bounced off the 200-day moving average located around the $20K mark, and subsequently broke above the $25K resistance level. Currently, the price is heading towards the key $30K area, a mid-term resistance level, where a breakout above it could lead to a bullish phase in the coming months.
However, the RSI indicator has entered the overbought area and is signaling a potential pullback or consolidation in the short term. In this case, the $25K area could be tested again as it now acts as a support level.
In the 4-hour time frame, the price of Bitcoin has been rising almost vertically. It recently broke the $25K level and retested it before continuing to rise. While the market structure is still bullish on this time frame, a consolidation or pullback is still possible because the 4-hour RSI indicator indicates a clear bearish divergence between recent price highs.
According to the Exchange Reserves metric, Bitcoin’s recent price surge has been initiated by a powerful uptrend during the last few weeks. Market participants, especially retail investors, might view the recent price increase as an opportunity to realize some profits and manage their risk.
As the chart below shows, the Exchange Reserves metric had declined until the price suddenly surged and surpassed the $25K crucial level. Since then, the metric has seen a slight increase and started an uptrend, meaning that the inflows to the exchanges exceed the outflows. Participants are sending Bitcoin to exchanges with the purpose of selling, and this metric’s behavior should be tracked in the upcoming days.
Although a bearish divergence is currently being observed, considering the price action on both daily and 4-hour charts, it is highly likely that Bitcoin will reach the $30K mark for the first time in almost a year. A pullback could get delayed until reaching the $30K level.
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