Bitcoin Price Analysis: BTC Could Initiate Next Rally If this Level Gets Broken

Bitcoin is fighting to get over two crucial resistance levels. A successful breakout above these vital barriers could potentially result in a bullish surge in the near future.

Technical Analysis

By Shayan

The Daily Chart

After touching the lower trendline of the descending wedge pattern, the price of bitcoin initiated a mini-rally followed by extremely low momentum and trading volume. The price now faces two substantial resistance levels: the 50-day moving average at $17.9K and the 100-day moving average at $18.7K.

A successful breakout above the abovementioned barriers should push the price toward the upper boundary of the wedge, roughly around $20.5K.

On the other hand, if the price fails to break above these critical resistance levels, a retest of lower levels toward the $15K region and another attempt at the lower trendline would become much more likely.

The 4-Hour Chart

The Fibonacci retracement is a valuable indicator for witnessing consolidation phases and price targets. Typically, the 0.5 and 0.618 Fib levels are considered significant resistance levels during bearish expansion moves.

The following chart shows that the price forms a low-momentum bullish trend inside an ascending price channel.

However, there is a static resistance region between the 0.5 and the 0.618 Fibonacci levels, between $18.5K and $19.1K, which is the main barrier in Bitcoin’s path toward higher price levels.

On-chain Analysis

The following Spent Output Value Bands (%) demonstrate the distribution of all spent outputs according to their value. Each colored band illustrates the ratio of the total value of spent outputs that have a value within the indicated range.

Bitcoin whales continue to allocate their assets. According to on-chain data, large bitcoin holders (also known as “Whales”) haven’t started yet to accumulate coins. The UTXO Value Bands Metric (1K-10K BTC) indicates that an upward trend in bitcoin’s price is often linked to whales’ accumulation.

However, since June 2022, whales have decreased their holdings by 367K BTC. The market should observe a heavy accumulation by this significant cohort to sustain a price increase.

In terms of spending, the ongoing high level of whale distribution is contradictory with a sign that could lead to a market cycle change. On the other hand, a significant portion of the BTC being spent since June 2022 (up to 80% of the total) came from whales.

To see a change in the market cycle, the market should also witness a much lower whale distribution.