BTC Skyrockets to $46K but Worrying Signs Appear
Bitcoin’s price has finally broken above the $45K mark on its path toward creating a new all-time high. While the technical chart looks strong, there are some worrying signals arising from on-chain metrics.
Technical Analysis
By TradingRage
The Daily Chart
On the daily timeframe, the price has clearly been bullish for the last few months. Following the breakout above the $40K level, the market has gone through a consolidation phase. However, the $40K area has acted as a formidable support level, pushing the price even higher.
BTC is approaching the $48K resistance level, which is the next significant obstacle. If it is broken to the upside, the probability of witnessing a new all-time high in 2024 will considerably increase.
The 4-Hour Chart
The 4-hour chart presents a clearer picture of the recent action. The price has formed a symmetrical triangle after pushing above the $40K mark.
However, it recently broke the triangle to the upside with astonishing momentum. From a classical price action standpoint, the cryptocurrency is looking primed to reach the $48K level soon. However, the Relative Strength Index is demonstrating a caution signal as it has entered the overbought region in the 4-hour timeframe.
Therefore, the market could consolidate or even pull back in the short term before continuing toward the $48K zone.
On-Chain Analysis
By TradingRage
Bitcoin Miner Reserve
While Bitcoin’s price has been rallying aggressively over the last couple of months, not all market participants are overly optimistic about the future. The most significant cohort on the Bitcoin network, miners, are demonstrating worrying behavior.
This chart depicts the miner reserves metric, which measures the amount of BTC held on miner wallets. An increase in the miner reserves shows accumulation by the miners, while a decrease points to distribution by them.
It is evident that during the last couple of months, amid the considerable surge in price, the miner reserve metric has been dropping rapidly. This indicates that the miners are using the newly introduced demand as an exit opportunity.
They are consistently selling their holdings to buyers. The resulting selling pressure could lead to a bearish price reversal if demand shrinks in the near term.
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Cryptocurrency charts by TradingView.
