BTC could retest $39,000 before bouncing back

Taker’s buy/sell ratio shows that the recent bounce from $33,000 to $43,000 has created some positive momentum in the market. On the other hand, technical analysis is signaling a near-term correction. Amid market ambiguity, it is best to wait and see which side prevails when volatility is expected.

Technical Analysis

Long term

BTC is still recovering from a 50% decline from its all-time high ($69,000) in November 2021.

Recently, the price rallied from $33,000, breaking a key downtrend line and surmounting the psychological resistance at $40,000.

This positive momentum continued and the price surged above the 50-day ma. However, the upwave has stopped as the 100- and 200-day moving averages generated a bearish cross and the $46,000 resistance level rejected the price. Currently, the 50-day ma is acting as support and is again pushing BTC towards the resistance area. Therefore, losing this line could cause BTC to drop to $39,000.

BTC/USDT daily chart | Source: TradingView

In the short term

Looking at the 4-hour time frame, it is clear that the RSI was forming a major bearish divergence as the price tested the $46,000 resistance area, indicating a lack of bullish momentum. The RSI has also dropped below the 50 level, showing that the bears are in control and a deeper retracement towards the $39,000 zone is possible.

BTC/USDT 4 hour chart | Source: TradingView

Onchain analysis

The taker buy/sell ratio is the balance between buy/sell sentiment in the futures market. Buy sentiment is stronger when the value is greater than 1, while sell sentiment is stronger when the value is less than 1.

Historically, when this indicator hits the green area, it shows more buying pressure and this is a great time to buy BTC. On the other hand, if it touches the red area, it indicates more selling pressure and the price is likely to start a correction phase. Currently, this indicator has reached the green area. Therefore, there is a high probability that this rally will continue in the medium term while the market may experience some correction on the way up.

Source: Cryptopotato

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.

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