Bitcoin Loses $23,000, But Is Another Wave Coming? (BTC Price Analysis)

The market has struggled to push above the significant resistance level of $25K and now the price is slowly declining. Therefore, the possibility of a correction before the next rally has increased.

Technical analysis

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The daily chart

The $24K-$25K region currently provides the most significant resistance for Bitcoin on the daily time frame. It is also an important psychological level, as it has been the main barrier for the last eight months.

However, due to the recent bullish phase of the market, the price has risen and reached the $24K region. Nevertheless, the bulls were unable to push the price over, and it was rejected. Moreover, a prolonged bearish divergence between the price and the RSI indicator increases the likelihood of a short-term correction.

Nevertheless, the cryptocurrency may retest the 200-day moving average and broken trendline before starting another rally, targeting $25K.

The 4-hour chart

On the 4-hour time frame, the price fell below the lower limit of the flag and retested the trendline to complete the pullback, signaling a validation of the described pattern. However, the positive momentum was weaker than expected, causing BTC to fluctuate.

Meanwhile, a static support level has formed at the $22.3K level. As a result, many sell stop orders below this support level provide sufficient liquidity for the market to address before the next move is initiated.

Therefore, this approves the short-term consolidation correction scenario for now, unless the bulls surprise the market and print a big green light on the BTC charts.

Analysis of the chain

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The Puell Multiple calculations give participants a broader insight into the market stage by asking, “How profitable are mining pools compared to the last year if all Bitcoins created were distributed immediately in the market?”

Historically, every time the metric fell to the green zone, the market finally found a bottom and marked the final phase of the bear stage. Consequently, the metric had fallen to the green zone due to Bitcoin’s massive downtrend in recent months. However, the recent rise in Bitcoin’s price has led to an increase and the exit of the green zone.

This can be interpreted as a bullish sign, indicating that the bear market is over and Bitcoin may have bottomed out. Still, a reverse scenario is always on the table, and the latest price rally could be another significant bull trap. Therefore, it is better to be careful.