• Bitcoin’s uptrend has paused at the major swing level of $22.8K.
• There are some bullish signs based on on-chain analysis.
• There is a significant resistance region ahead in Bitcoin’s path.
Bitcoin is currently in the midst of a tumultuous uptrend that has seen the digital asset reach all-time highs, yet it appears to have temporarily paused upon arriving at the major swing level of roughly $22.8K. Though the market is looking for direction as the price has now reached a critical resistance zone, there are some bullish signs based on on-chain analysis that suggest that Bitcoin may be able to breakthrough this resistance region.
The descending trendline had been supporting the price until Bitcoin experienced a sudden cascade and dropped below it in late June 2022. This trendline then turned into a substantial resistance level and has rejected the price ever since. However, Bitcoin has initiated a surge and currently aims to surpass the trendline. The 4-hour chart shows that this resistance has been tested a few times, with the most recent attempt being on January 22nd. The rejection of this resistance caused the price to pull back to a minor support, which is currently being tested.
On the other hand, the on-chain analysis has been showing bullish signs, with the number of large Bitcoin holders increasing at a steady rate, pointing towards the possibility of large investors being present in the market. Additionally, the rate of inflows of BTC into exchanges is also decreasing, suggesting that the market may be preparing for a bull run.
Despite these bullish indicators, Bitcoin may still have a significant resistance region ahead in its path. The 4-hour chart shows that the price has been struggling to break above $22.8K, and if it fails to do so, it is likely to pull back to a minor support. This support is currently being tested and if it is broken, Bitcoin may find itself in a bearish trend in the short-term.
Overall, Bitcoin’s recent uptrend has been impressive and has the potential to take the digital asset to new heights. However, there is a significant resistance region that needs to be broken in order for the uptrend to continue. On-chain analysis does show some signs of bullishness, but there is still a risk of a pull-back if the resistance region is not broken. Therefore, it is best to be cautious and wait for further confirmation from the market before taking any drastic action.