Bitcoin is once again dropping lower after failing to breach the $108K resistance level.
Investors are worried that this could be the start of a much deeper correction as the asset is currently beneath the coveted $100,000 mark.
Technical Analysis
By Edris Derakhshi (TradingRage)
The Daily Chart
On the daily chart, it is evident that BTC’s price has been consolidating below the $108K level and is now breaking the $100K support zone to the downside.
If this level is lost, a deeper drop toward the $92K area could be expected in the coming weeks. With the RSI also showing values below 50%, it is quite likely that this bearish scenario will become a reality.
The 4-Hour Chart
On the other hand, the 4-hour chart offers more hope for a rally higher in the coming months, as the asset is moving inside a large bullish flag pattern.
At the moment, the price is dropping toward the lower boundary of the pattern, and if it holds, the market could rise higher and break the pattern to the upside, which could lead to a bullish continuation. However, if the lower trendline breaks down, things can get ugly very quickly, and the market will drop to the $92K level and probably even lower.
On-Chain Analysis
By Edris Derakhshi (TradingRage)
Long-Term Holder SOPR
Bitcoin’s price has been consolidating around all-time high values over the past few months, and this is likely due to the massive amount of profit-taking by investors. This is observable on the Long-Term Holder SOPR metric.
The Long-Term Holder SOPR indicates the ratios of profits taken by investors who have held their BTC for more than 6 months. As the 30-day moving average of this metric shows, these holders have been actively selling their BTC to realize profits, which has led to the market’s failure to rally higher.
However, these profit-realization values are still lower than those witnessed last summer when the market was trading lower. Therefore, if the selling pressure is somehow reduced, there is a high probability that BTC will rally even higher.
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