Bitcoin’s price has been on an impressive rally, having surpassed both the 50 and 100-day moving averages. It has also broken through the upper trendline of its wedge pattern and reached a significant resistance level around $21.5K. The price momentum is notable, but the market now faces a critical challenge: whether Bitcoin can successfully break through this resistance level.
If Bitcoin manages to surpass the $21.5K level, the demand for the asset may return, potentially triggering a new rally toward higher price levels. The next barrier on Bitcoin’s path would be the $25K level, which has acted as a significant resistance point. However, given the current impulsive nature of Bitcoin’s rally, the market might experience a period of consolidation before any further bullish momentum materializes.
4-Hour Chart: Double-Top Reversal Pattern Emerges
On the 4-hour chart, Bitcoin’s price has made a full recovery from the FTX crash and reached the prior major daily pivot at $21.5K. These pivots are critical levels in classic price action patterns, and if Bitcoin manages to move above this point, it could indicate the start of a bullish uptrend. However, the price has also formed a double-top reversal pattern, a bearish signal that suggests a potential rejection at this resistance.
If the price gets rejected at this level, a pullback or leg down might occur, making the next few hours crucial for determining Bitcoin’s mid-term direction. Traders will need to closely monitor the $21.5K region to gauge the market’s reaction.
On-Chain Analysis: Miners’ Selling Pressure Suggests Caution
Bitcoin miners play a pivotal role in the market, as their actions directly impact the supply of the cryptocurrency. Over the past few months, miners have been distributing their holdings rather than accumulating or holding onto them. This behavior is likely a result of the downward price pressure that Bitcoin has experienced, forcing many miners to sell their coins to cover operational costs.
The recent price surge has prompted miners to sell into the strength, which is reflected in a significant spike on the Miners Position Index. This situation is reminiscent of April 2022, when Bitcoin was trading around $46K and miners’ selling behavior contributed to a rapid decline in price. As a result, investors should remain cautious, as the selling pressure from miners could lead to another downturn in the short term, potentially extending the bear market.
Bitcoin at a Critical Juncture
Bitcoin is currently at a crucial price point, with the $21.5K resistance serving as a pivotal level for the next move. While the market has seen substantial bullish momentum, there are also signs of potential bearish reversals, particularly with the formation of a double-top pattern and the miners’ selling pressure. If Bitcoin successfully breaks through $21.5K, the path to $25K will be more likely. However, if the price is rejected, a decline back toward lower levels is also possible. Traders and investors should watch this resistance level closely to understand the market’s direction.
