Bitcoin Tests $22K, But Worrying Signs Are Flashing (BTC Price Analysis)

The Bitcoin market is often full of surprises and last week was no exception. Bearish sentiment was dominant and the cryptocurrency appeared to be days away from making another lower low. However, a significant price increase has changed the view from a technical aspect.

Technical analysis

Of: Edris

The daily chart

Looking at the daily time frame, Bitcoin has rebounded from the key support level of $18,000 once again, impulsively rising above the $20,000 mark last week. The price has now reached the 50-day and 100-day moving average lines, converging around the $22K area.

If price breaks these moving averages to the upside, a crossover between them will occur, which is a strong bullish signal. However, for the market to be considered bullish in the medium term, a breakout above the significant trendline shown on the chart and the $24K resistance level would be required.

On the other hand, if the price is rejected from any of the aforementioned static and dynamic resistance levels, a return towards the $18K level and even a breakout below it would be likely.

The 4-hour chart

On the 4-hour chart, the price has broken above both the bearish trend line and the $20,500 level after rebounding from the $18K area.

Currently, the cryptocurrency is testing the $22K resistance level and a bullish breakout from this level will pave the way towards $24K. However, the trend seems exaggerated. This suggests a bearish pullback towards the $20,500 level – which has now turned into support.

In addition, the RSI indicator, which had signaled a massive bullish divergence before the reversal, now shows a clear overbought signal with values ​​above 70%. This further increases the likelihood of a short-term withdrawal.

Onchain Analysis

Of Shayan

Binary Coin Days Destroyed (CDD) Metric

The long-term owners are an important cohort among the market players. Therefore, tracking their behavior can help predict the market’s direction.

The Binary Coin Days Destroyed metric can be used to identify the long-term holders’ activity. It points to 1 if supply-adjusted coin days destroyed is greater than the average supply-adjusted CDD and points to 0 otherwise.

The following chart shows the binary CDD calculation (14-day SMA) and Bitcoin’s price. A peak in the calculation indicates potential selling pressure from long-term owners. Every time the calculation printed an increase, the price dropped significantly.

Currently, both the metric and the price have experienced a massive increase. Long-term owners may find this decline an excellent opportunity to distribute their assets and manage their exposure to the market.