The Bitcoin price slightly increased by 0.9% to $60052 during the Sunday trading session. However, the BTC price has been wavering around this psychological level for the last two weeks, and a low volatile weekend does not confirm its suitability. Will the recovery trend resume, or sellers will counterattack for prolonged correction?
Bitcoin Price Analysis Hints Recovery Amid Flag Pattern Formation
In the last two weeks, the Bitcoin price showed a notable reversal from $49000 to $60052, registering a 22% gain. Consecutively, the market cap jumped to $1.182 Billion. This bullish turnaround above the 38.2% Fibonacci retracement level projected a healthy correction needed to recuperate the exhausted bullish momentum.
Moreover, an analysis of daily charts shows the formation of a bullish continuation pattern called a flag. This pattern consists of two downsloping trend lines, which drive a temporary counter-trend move before a strong breakout.
If the pattern holds true, the Bitcoin price prediction hints at a 14.6% rally to challenge the flag resistance at $68714. An upside breakout from this resistance will better confirm the end-of-consolidation trend.
The BTC price above the 200-day Exponential Moving Average hints at a broader market trend turning bullish.
Negative NRPL Ratio Points to BTC Market Bottom
Data from Cryptoquant shows the BTC-Daily Realized Profit Loss Ratio dips to the negative region amid recent market correction. This metric tracks the ratio of realized profits to realized losses on the Bitcoin network, which is essential to determining the market sentiment and identifying potential turning points.
Last Thursday, Bitcoin price reversal from $56,000 saw the NRPL ratio drop to -152,121,989, highlighting that realized losses have surpassed profits. This shift suggests weaker hands have exited the market, potentially reducing selling pressure. As a result, the asset could witness an inflow of fresh accumulation, setting the stage for a potential upward breakout.
The metric movement toward higher realized losses compared to profits is often observed at the bottom of a market correction, signaling a significant shift is underway.
On the contrary, if the bitcoin price fails a 200-day EMA breakout, the sellers could strengthen their grip to prolong the correction trendline. A bearish breakdown below the flag pattern support will invalidate the bullish and plunge the asset below $50000.
Frequently Asked Questions (FAQs)
The flag pattern, a bullish continuation formation, suggests that Bitcoin may experience a 14.6% rally to challenge the flag resistance at $68,715.
On-chain data, specifically the Daily Realized Profit Loss (NRPL) Ratio, shows that realized losses have surpassed profits, often signaling the end of a market correction.
A bearish breakdown below the flag pattern support or failure to maintain the 200-day EMA could invalidate the bullish outlook.
Sahil Mahadik
Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Source: https://coingape.com/markets/is-bitcoin-price-correction-investor-recovery/
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