Bitcoin’s price is currently losing a key level, which could lead to a deeper correction in the coming weeks.
Technical Analysis
By Edris Derakhshi (TradingRage)
The Daily Chart
On the daily timeframe, the asset has been rejected from the $100K resistance level twice in the last couple of months. This failure to continue higher has led to a drop toward the $92K support zone, which is now getting broken to the downside.
If this level is lost, a decline toward the $85K area and even a deeper correction toward the $80K zone could be expected.
The 4-Hour Chart
As the 4-hour timeframe suggests, the price is currently attacking the $92K support zone with massive bearish momentum. With the $92K level already holding the price on three occasions in the last few weeks, the level has definitely weakened, and there’s a high probability that the market will drop lower.
The RSI also shows values below 50%, further increasing the likelihood of a deeper correction in the short term.
On-Chain Analysis
By Edris Derakhshi (TradingRage)
Bitcoin Coinbase Premium Index
While Bitcoin’s price is currently breaking a significant support level to the downside, it might be useful to identify where the selling pressure is coming from. In this case, the Coinbase Premium Index can be a very useful tool.
This metric measures whether American investors are buying or selling heavier than those based in other nations by comparing the price of the BTD/USD pair on Coinbase and the BTC/USDT pair on Binance.
As the chart suggests, the index has been deeply negative for the past month, which indicates that the US market is now selling Bitcoin more aggressively. As long as this metric remains negative, the correction can be expected to continue.
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