September 30, 2022

Bitcoin Price Analysis: Following New ATH and Quick Retracement, What’s Next for BTC?

3 min read

Bitcoin’s cost lastly entered a correction to flush out the leverage, cool off the overbought conditions, and help construct a structure after the big rally in the past three weeks. This happened after the open interest, funding rates, and take advantage of ratio all reached elevated levels.

The near-term support at $60K appears to be holding, which is a positive signal. Provided the current selling pressure, it’s unlikely that the weekly close will be above $64.8 K.


Chart by TradingView Near-Term Technical Indicators for BTC Price The cryptocurrency needs to continue holding$60K

on a closing basis. The perfect situation would be to hold$60K, form a cup and deal with, retest$64.8 K, and break out greater towards $70K to $80K. If we see a closing listed below$60K, that would be a near-term bearish signal and would increase the drawback danger to $59.7 K,$ 58.3 K,$57.1 K,$56.5 K, and $53K. Assistance is likewise anticipated at the 21-day EMA. The mid $50K levels likewise hold strong technical and on-chain support, which is a bit reassuring in case of another round of liquidations. The deepest level for a pullback we had actually like to see is $53K – – the previous high from September. Breaking below this level would trigger more disadvantage risk – – a situation that’s less perfect for the bulls.

The general structure continues to recommend that BTC’s price is in Wyckoff Accumulation Phase E, where it normally speeds up to the upside but more than likely with shakeouts on the way up. In the short-term, there may be a bullish divergence forming on the hourly chart, but it’s essential to see bitcoin holding $60K and $59.6 K for recognition and begin making greater highs.

On-Chain Analysis of Bitcoin’s Price

The overall trend based on on-chain metrics stays strongly bullish. The Mean Coin Age continues to trend higher for 5 months now.

Recently, it decreased for two days but quickly resumed its uptrend, recommending that long-term holders (LTHs) were dispersing gently and that there’s no pattern of serious circulation as BTC made a brand-new all-time high.

This indicates that long-term holders and miners continue to hold, dispersing gently occasionally. The open interest visited $1.2 B considering that peaking at $15.2 B, and the financing rates are currently at 0.03. The utilize ratio remains at 0.18, which resembles that from the peaks in April and September this year. This means that further liquidations are possible, and it’s crucial to stay careful.


Chart by CryptoQuant The ASOPR stays somewhat above 1, suggesting that LTHs are not taking profits aggressively throughout this pullback. All exchange reserves have likewise been dropping even more to multi-year lows driven by considerable outflows on acquired exchanges.

Bitcoin becomes more scarce on exchanges that makes it more difficult for institutions to accumulate, as there’s most likely going to be less BTC for sale.

In Conclusion

Bitcoin rallied significantly in the previous three weeks, and the take advantage of in derivatives was increasing considerably – – this is why a near-term pullback could be healthy for the market.

We require to see support holding in between $60K and $53K to retain the structure and form a greater low. The overall trend in fundamentals and on-chain remains bullish, and there are no signs of aggressive circulation forming, which suggests that there’s more upside remaining in this booming market.

The dollar continues to press lower after topping at a crucial technical level which is likely to be a tailwind for BTC, specifically in the coming months.

The present correction looks to be a near-term shakeout with bullish continuation likely to follow as soon as the take advantage of is flushed out, causing a retest of $64.8 K and a breakout towards $70K to $80K, so long as the trend in on-chains remains intact.

Volatility in the next few months ought to be anticipated, however bulls remain in control.