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- The structure was bullish on the daily time frame.
- Losses of 12% in less than two weeks emphasized bearish strength.
Analysts comparing Bitcoin’s on-chain metrics in 2023 to those in the 2018-2019 cycle found that Bitcoin could have formed its long-term bottom in January. Investors with a long time horizon could be rewarded later this year.
Read Bitcoin [BTC] Price Forecast 2023-24
Price action analysis showed that while there has been significant selling pressure recently, bulls are still strong in the market. The confluence of support in the $21.6k-$22k area underlined the possibility of an increase in prices across the market.
September’s bullish breaker was tested again
Source: BTC/USDT on TradingView
From June to November, Bitcoin traded in a range that stretched from $18.9k to $24.2k. The midpoint of this range was at $21.6k and was previously tested as support in mid-February. The price has sunk to this region again after a rejection of $25.2k.
While the king of crypto was able to break the range highs, the bulls were unable to defend their gains. This showed strong profit-taking tendencies throughout the market and also highlighted the importance of $24.8k – $25.2k as resistance.
The structure on the daily chart showed a series of higher lows, marked by the purple trendline support. While momentum in the lower time frame was strongly bearish (lower lows since Feb. 23), the retest of September’s bullish breaker could prove crucial.
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Invalidating the bullish idea would mean a drop below $21.6k. A daily close of the session would break the structure and flip the trend to bearish.
The OBV fell to a new low in 2023, even though prices are much higher. This supported the idea that selling pressure was dominant and the rally was about to end. The RSI showed weak bullish momentum in late February, recently dropping below the neutral 50 to hand over the reins to the bears.
There were signs of accumulation, but holders continued to take profits
Source: Sentiment
The average coin age of 90 days was on the rise, showing BTC accumulation across the entire network. The last time this happened was in October. The metric started falling before prices did, and a similar move in the coming weeks could be an early sign to sell Bitcoin.
Dormant circulation has shown noticeable spikes since early December, highlighting how fear dominated the market.
The 90-day MVRV ratio slid south but remained positive, suggesting that the profit-taking may not be over.