Heading into 2023, the market is starting to show some interesting moves, and Bitcoin is no exception. Its price is currently testing major resistance zones and the outcome could determine the near-term trend of the cryptocurrency market.
technical analysis
Along: Edoris
daily chart
On the daily timeframe, prices seem to be close to finally disrupting the consolidation of the last few weeks as the 50-day moving average is testing near $16,800 again.
For a valid bullish breakout, there is little resistance and a move up to the $18,000 resistance level is imminent. This could lead to a generally bullish market structure.
However, as the price has yet to break out of the 50-day moving average, there is a good chance of a refusal and a drop towards the $15,000 support level.
4 hour chart
Things look more complicated on the four-hour timeframe as price action shows signs of rejection from the $16,800 level.
The RSI indicator is also approaching the overbought zone above 70% and should be monitored closely. This is a signal that could suggest a denial and a bearish reversal. In this case, the price could move higher towards his $15,500 support area.
Still, it’s too early to call it a bearish move as the price is approaching the resistance level and could impulsively cross it later in the day.
In summary, the market is in such a critical area that the next few days, possibly hours, will likely set a short-term trend based on the price’s reaction to the $16,800 area.
On-chain analysis
Along Shayan
The following chart consists of exchange-to-exchange flow (spot to derivatives exchange) metrics along with Bitcoin price. Clearly, the derivatives market is closely correlated with both bullish and bearish stages of the market.
An increase in the metric indicates high activity in the derivatives market. Participants typically use derivatives exchanges to manage their risk and exposure to the market, and some use leveraged options to increase their profits.
Based on the graph, the metric’s 365-day moving average shows a high correlation, with spikes during Bitcoin bull markets and vice versa during bear markets.
Currently, the index is plummeting with considerable momentum. Therefore, it may be too early for Bitcoin to start a bull market as the metric still has room to go down.
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cryptocurrency chart By TradingView.
