Content:
Bitcoin has been on a notable upward trend in recent weeks, consistently moving up within its rising channel and recently reaching a new peak of approximately $123,000.
However, there are indications of buyer fatigue and potential distribution. From price movement patterns to miner actions and sentiment on funding, the market appears to be nearing a critical turning point where a pullback might be necessary before another upward move. Let’s delve into the details.
By ShayanMarkets
Analysis of the Daily Chart
In the daily timeframe, Bitcoin continues to reside comfortably within its long-term ascending channel and has recently broken above the $108K–$110K resistance level. The price peaked at $123K and seems to be aiming for the $140K range. This area aligns with a potential profit-taking zone and the channel’s mid-line.
The market structure remains strongly bullish, with uninterrupted higher highs and higher lows. The 50-day and 100-day moving averages, positioned around the $100K area, are upward sloping, providing robust dynamic support just below the current price.
Should Bitcoin experience a decline, this zone, along with the channel’s lower boundary, is the most likely area for a bullish response. However, as long as the price stays above $108K, the bulls maintain control, and a revisit to the channel’s lower boundary may not occur soon.
4-Hour Chart Insights
The 4-hour chart displays a forming Head and Shoulders pattern, with the left shoulder already in place, the head near $123K, and the right shoulder currently developing. Crucially, this pattern hasn’t been confirmed yet, as the neckline remains intact.
However, if the neckline around the $117K–$116K level fails to support the price, a bearish move toward the golden Fibonacci zone is quite possible.
The potential rebound area is between $112K and $111K, which corresponds to the 0.618–0.786 retracement levels. This region matches the rally’s starting point from early July, creating a confluence of both technical and psychological support.
If the neckline breaks with volume, the decline could accelerate quickly as trapped long positions exit and short-term momentum shifts bearish. Until then, bulls have an opportunity to defend the neckline and avert the reversal pattern, but time is running out.
On-Chain Analysis
Increase in Bitcoin Retail Activity
Turning to on-chain metrics, the Miners Position Index has recently surged, indicating a significant increase in miner outflows to exchanges. Historically, this level signals heightened selling activity from miners, often coinciding with local peaks or market cooling periods. The timing of this increase, as BTC reached $123K, is notable. Miners typically sell during strong price periods to maximize profits and sustain their operations.
This type of on-chain activity often precedes either a local peak or a period of sideways movement as the market absorbs this supply. While it doesn’t necessarily predict a macro reversal, it does warrant short-term caution, especially when combined with overheated funding rates and slowing spot momentum.
