Daily Chart Perspective
On the daily timeframe, the market is in a sustained downtrend, having broken below a major descending channel, the $110,000 support zone, and the 100-day moving average that coincided with it. The loss of these crucial levels points to an increased chance of a deeper correction. Potential downside targets are the $104,000 fair value gap or the 200-day moving average, which is close to the significant psychological level of $100,000. Additionally, the Relative Strength Index (RSI) remaining under 50 indicates that momentum is currently in favor of sellers, reinforcing the likelihood of continued price drops.
4-Hour Chart View
The 4-hour chart shows a clear bearish trend, with the price consistently forming lower peaks and troughs within a narrow descending channel. The support levels at $117,000 and $110,000 have been definitively breached and subsequently retested, making the $104,000 fair value gap the next logical target. The RSI, sitting below 50, confirms the bearish momentum. The price is also nearing the Fibonacci golden zone, with the 78.6% retracement level aligning with the $104,000 fair value gap. This area is a key target and could be a point of potential recovery, and how the market responds to this level will be a significant factor in determining the future direction over the coming weeks.
On-Chain Metrics: Exchange Holdings
The chart on exchange reserves illustrates the quantity of Bitcoin held on trading platforms, shown by the purple line, alongside its USD price, represented by the white line. A notable trend is the continuous reduction in exchange reserves since the beginning of the year. This signifies that investors are moving their Bitcoin off exchanges and into secure cold storage, reducing the amount of supply readily available for trading.
From a fundamental supply and demand standpoint, this is a very important trend. As the supply of Bitcoin on exchanges diminishes, the market becomes tighter. If demand remains stable or grows, this supply-side pressure could drive prices higher in the long run, as has been seen with Bitcoin's recent surge to a new all-time high. However, short-term price adjustments, such as the recent pullback, can still occur if demand weakens or broader economic conditions shift.
