Here’s the Final Resistance for BTC Ahead of a Potential Rally to $30K (Bitcoin Price Analysis)

Bitcoin’s recent price increases underscore the demand and confidence in the crypto market. This resulted in a significant increase in many cryptocurrencies. However, the price still faces a critical resistance level of $25K before calling the bear market over.

Technical analysis

Of Shayan

The weekly chart

Looking at the bigger picture of Bitcoin’s price using the weekly time frame, the price action looks like the final capitulation phase of the 2018 bear market. During the final phase of the 2018 bear market, Bitcoin’s price dropped significantly and experienced a 50% drop. As a result, many market players capitulated and realized significant losses. Bitcoin then bottomed out and unexpectedly rallied, starting the 2019 bull run.

The same structure is happening now; after a massive downtrend, falling to the $15K level, the market experienced a series of capitulation events. It has recently started an uptrend, and has surpassed many key resistance levels.

Despite the portrayed similarities, it may soon be calling it a bull market as it requires more consideration.

The daily chart

On the daily time frame, it is clear that the price surpassed the multi-month descending trend line, entered a correction phase and formed a pullback. During the correction stage, the price retested the broken trend line and was supported by the $22K support level.

However, Bitcoin has reached a crucial and decisive resistance level of $25K. It is a technical and psychological barrier and has been the most important for the price since mid-June 2022. Nevertheless, if BTC surpasses this level, an impulsive rise towards the next resistance region, the $30K level, will be more likely.

Nevertheless, a bearish divergence exists between the price and the RSI indicator, which could lead to a short-term correction for the price before trying to break the $25K level.

Analysis of the chain

Of Shayan

The Bitcoin bear market has resulted in huge losses for all participants in recent months. Even long-term investors, who usually use their coins in profit, are now experiencing losses. It is common for long-term owners to trade this way in the late stages of a bear market when all market participants panic sell or “capitulate”.

A long-term holder’s SOPR calculation measures how much profit or loss they realize. Since the end of May 2022, this metric has been trending below one, indicating that long-term owners are losing money.

Historically, the beginning of the bull market coincided with the metric crossing above one. Most recently, the calculation began to recover and increased slightly due to the rise in Bitcoin’s price.

Even so, it is still too early to call the $15.5K level the bottom of the bear market, as the recent impulsive rally could be a bull trap. It is important to pay close attention to the SOPR measurement of the long-term holders in the short term in order to predict the price direction.