Bitcoin’s Price Analysis

Bitcoin’s price has dropped significantly after failing to maintain levels above $100,000, but signs of recovery are emerging.

Technical Analysis

By Edris Derakhshi

The Daily Chart

On the daily chart, Bitcoin recently found support around the $80,000 zone, aligning with the 200-day moving average. Following a sharp correction from its $100,000+ peak, there are signs of recovery as it currently trades around $85,000.

However, strong resistance exists around the $92,000 area, which previously acted as supply. The RSI is climbing back towards neutral territory but hasn’t reached overbought levels, indicating potential for further upside if bullish momentum persists. Daily closes above the 200 DMA and the resistance near $92,000 would confirm recovery and a bullish continuation.

The 4-Hour Chart

The 4-hour chart reveals a rising wedge pattern that BTC has been trading within for some time. Following rejection from the $87,000 region, a classic bearish reversal setup is forming, which often indicates a pullback after a strong rally.

Immediate support is near the $82,000 – $80,000 area, matching a prior consolidation zone. Additionally, the RSI on the 4-hour chart is declining rapidly, signaling a weakening bullish trend. If the wedge isn’t broken to the upside soon, a deeper retracement towards the $80,000 support zone may occur in the short term.

On-Chain Analysis

By Edris Derakhshi

Bitcoin Active Addresses

The recent decline in Bitcoin’s active addresses raises concerns. After peaking in February 2024, active addresses have been consistently falling, despite BTC’s price reaching new highs. This divergence indicates weakening network participation and user engagement.

The sharp decrease in active addresses over the past months implies fewer unique participants are transacting on-chain, reflecting a drop in organic demand and market interest. If this trend continues, it could exacerbate bearish sentiment, as reduced network activity typically precedes or confirms price corrections. Currently, the declining active addresses metric may signal that the recent bullish bounce lacks fundamental on-chain support, heightening the risk of a deeper crash.