Bitcoin price shows some worrying signs that a deeper correction is likely to occur, as the price has failed to hold above the $100,000 level.
Technical Analysis
Daily Chart
On the daily chart, the price has gradually increased over the past few weeks, creating new all-time highs above the $100,000 level. However, in the past few days, the market has not continued its upward trend, dropping below $100,000 and even reaching a low of $92,000. If the market does not soon regain this area, a deeper correction towards the $90,000 level and even the support zone of $80,000 may occur in the short term.
4-Hour Chart
Looking at the 4-hour timeframe, the price action seems a bit harder to predict. The market has created higher highs and lower lows within an ascending channel but has been rejected from the upper boundary of the channel around the $108K mark.
The $100,000 level has been broken to the downside and the RSI also shows a value below 50%, indicating that the market momentum has shifted to bearish.
However, the lower trend line remains intact, which may lead to a quick recovery above the $100,000 level and continued upward momentum. However, if the pattern breaks to the downside, a drop below the $90,000 level is expected.
On-Chain Analysis
Active Addresses (100-Day MA)
Analyzing on-chain data can provide valuable and interesting insights into the underlying market dynamics. One of these key metrics that can provide insights beyond price action is the active address metric.
Bitcoin network activity is one of the fundamental factors that can help value BTC. The chart shows that the 100-day moving average of active addresses has quickly rebounded in the recent uptrend and surpassed the $70,000 region.
However, it has not yet reached an all-time high, indicating a clear divergence between price action and network activity. Therefore, if network activity does not soon reach a new all-time high and begins to decline again, Bitcoin may correct over the long term.
