Bitcoin continues to experience a challenging week, with the cryptocurrency’s price facing rejection and highlighting the current lack of bullish momentum in the market. Despite this, Bitcoin has found a substantial support range at the $80K mark, which is anticipated to hold the price steady in the short term.
From a technical analysis perspective, Bitcoin recently witnessed a significant rejection after momentarily breaking above the 100-day MA, indicating a false breakout and insufficient bullish momentum. This failure to break through further cements the current bearish sentiment in the market.
However, Bitcoin is nearing a significant support range which includes the psychological $80K level and the 0.5 ($84K) – 0.618 ($78K) Fibonacci retracement zone. This critical area is expected to function as a support zone, potentially triggering a new consolidation phase around the $80K mark.
Given these circumstances, it is likely that Bitcoin will continue its decline towards the $80K mark in the short term, with price action set to determine the next significant move.
On a smaller timeframe, Bitcoin has faced increased selling pressure at the upper boundary of its descending channel, leading to a strong rejection. The cryptocurrency is currently testing short-term support at $83K, in alignment with a prior swing low. While there may be some buying interest at this level, the overall market conditions point towards a lack of bullish momentum, with sellers remaining in control.
As a result, it is likely that Bitcoin will break below the $83K mark and trend towards the channel’s mid-boundary at $80K, a critical point of inflection. While this may support the price and lead to a consolidation phase, a break below this level could trigger a further decline towards the $77K threshold.
In terms of on-chain analysis, Bitcoin’s interaction with the Realized Price of long-term holders’ UTXOs has traditionally been a key indicator of market direction. This represents the average acquisition cost of these holders. Bear markets typically commence when the price falls below the realized price of the 6-12 month cohort, indicating losses and potential distribution by these large investors.
At present, Bitcoin is trading below the realized price of the 3-6 month cohort at $88K but remains above the 6-12 month cohort’s realized price of $62K. This suggests that while the market is in the midst of a deep correction, it is premature to confirm the onset of a bear market.
It is likely that Bitcoin will continue its corrective retracement within this range until new demand enters the market. The $88K level remains a critical threshold, with a breakout above it potentially signaling the beginning of a new uptrend.
