Did Bitcoin Mark a Local Top? Here is the level to watch: BTC Price Analysis

Bitcoin’s impulsive rally seems to have stopped temporarily and the price is likely to enter a correction phase before the next leg up. Overall, Bitcoin faces significant resistance at the $30K level, which has not been tested yet.

Technical analysis

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The daily chart

After forming a retracement to the 61.8% Fibonacci entry level of $19.6K, the price started a massive rally with a current high above $28K. However, the bulls could not reach the significant resistance region of $30K.

This price range also acts as a psychological resistance zone, as many traders believe that once the price exceeds the $30K level, the bear market will officially end. Nevertheless, a clear divergence between the price and the RSI indicator can be identified, potentially leading to a short-term correction or consolidation stage.

The 4-hour chart

The impulsive bullish rally is more evident on the 4-hour time frame. However, recent price action indicates that the bullish momentum has waned and the price is likely to enter a short-term consolidation or correction phase.

Bitcoin could retest two major support levels in this scenario: the significant support level at $25K and the price zone between the 0.5 and 61.8 Fib retracement levels, roughly at $24.4K and $23K.

Nevertheless, there is also a divergence between the price and the RSI indicator in the 4-hour time frame, which increases the likelihood of a short-term correction before the next significant move.

Analysis of the chain

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As a result of the recent rise in Bitcoin’s price, traders are seeing their portfolios rise above the break-even point, resulting in a shift towards positive market sentiment.

Net Unrealized Profit and Loss (NUPL) measures the profit or loss of all coins as a ratio calculated by dividing the difference between market value and realized market value cap.

Assuming the last coin transfer is due to a purchase, NUPL indicates total profit or loss in all coins. After months of negative values, the recent rally saw NUPL enter the yellow zone, meaning more investors are now experiencing profits. This shift can be interpreted as a bullish signalas fewer market participants are pressured to sell their coins to prevent further losses.