Bitcoin’s price has been relatively stagnant in recent days, hovering around the $30K level. However, this period of consolidation is unlikely to continue indefinitely. Let’s take a closer look at the technical analysis to identify two possible targets for BTC in the short term.
On the daily chart, we can see that the 50-day moving average has been holding the price around the $30K level. Unfortunately, it has failed to push the market back above the $30K mark in the past few days. There is a possibility that the price might break to the downside and drop towards the 200-day moving average, which is located around the $27K mark. The 200-day MA has proven to be a key indicator in the past, pushing the price higher back in February. On the other hand, if the price manages to climb back above the $30K level, we could expect a rally higher and a potential test of the $38K resistance zone in the coming weeks.
Now, turning our attention to the 4-hour chart, things start to get more interesting for BTC. A large falling wedge pattern has been forming since the beginning of July, and it appears that the price is breaking out to the upside. If this breakout is valid, it could signal the start of a new bullish phase, with the market surging higher. However, there is still a chance that the breakout might turn out to be a fake one, which would be disastrous. Fake breakouts often lead to massive crashes, and in this case, it could result in a rapid decline towards the $27,500 support level in the short term. Nevertheless, with the RSI indicator showing values above 50%, the momentum seems to be in favor of buyers, making a bullish move more probable.
In addition to technical analysis, it’s essential to consider sentiment analysis to gain further insights into Bitcoin’s price action. While the price has been consolidating around the $30K level for the past few weeks, analyzing the futures market sentiment can provide valuable information. Funding rates, which represent traders’ sentiments in the perpetual futures market, have recently shown positive values. This indicates a relatively bullish sentiment among long-position traders who are willing to pay funding to short traders. However, despite the positive sentiment, the price has failed to climb higher, which raises a red flag. If this pattern continues, it could signal a potential drop in the short term, as a long liquidation cascade may be on the horizon.
In conclusion, based on the technical analysis, two possible targets for BTC in the short term are a drop towards the 200-day moving average at around $27K or a rally higher and a potential test of the $38K resistance zone if the price climbs back above the key $30K level. However, it’s important to keep an eye on sentiment analysis as well, as a failure to see upward movement despite positive sentiment could indicate a potential market drop. As always, it’s crucial to monitor the market closely and use these insights as a guide to inform your trading decisions.