Bitcoin’s recent correction is just one step in a stronger bullish rally

Bitcoin regained psychological support at $ 60,000 and the 20-day EMA after breaking through yesterday. This is a positive development that indicates strong buying pressure at a lower level.

A large amount of BTC was poured into the exchanges during the recent decline, around 9,435 BTC. However, it’s not coming from long-term investors.

BTC / USDT daily chart | Source: TradingView

Technical outlook

Overall, the trend remains bullish despite the short-term weakness. BTC is up 64% in a month with open interest skyrocketing and leverage also close to peaking. The recent shock can be seen as a bullish signal as it eliminates excessive long leverage and provides a basis for the next big move.

This makes the overall market more sustainable as extreme rallies tend to lead to larger pullbacks. It’s too early to confirm a local low at $ 58,000 as BTC remains below the major downtrend line at $ 62,000 and needs to hit a higher high above $ 63,700 to confirm.

There is a strong support area between $ 53,000 and $ 58,300, both from a technical and a chain perspective.

On-chain analysis

Although the BTC balances on the exchanges rose 9,435 BTC on September 27, on-chain indicators do not show a positive distribution from long-term owners or miners.

Source: CryptoQuant

This can be clearly seen in the indicator for the average age of the coins. The fact that it has just hit an all-time high shows that most recent selling pressure has been mainly from new coins.

The ASOPR has now dropped back to Level 1, which indicates that the overall market is balanced. This was a level of support for BTC during bull markets. In September, ASOPR fell below 1 during the correction and then pushed further up.

Source: CryptoQuant

Conclude

The current BTC retracement is good for the market structure and makes the upward trend more sustainable. The stocks continue to rise and the dollar remains in a downtrend, making it easier to trade risky assets.

In the short term, there is still a risk of a sell-off as the leverage remains high at around 0.18. However, it is good to see that the trend has been declining since the last day.

Overall, Bitcoin will continue its upward trend as long-term investors and miners continue to hold their BTC.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

SN_Nour

According to Cryptopotato

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