Bitcoin continues to show interesting market movements, having reached a new all-time high. However, the current price state raises questions about a potential correction.
Technical Analysis on Daily Chart
After breaching the previous all-time high at $111K and triggering a significant short squeeze, BTC surged to set a new all-time high at $123K. This confirms high market demand and investor confidence. However, current dynamics stall at this critical resistance level, indicating potential selling pressure.
A corrective move is anticipated toward the support zone around $107K - $111K before the next impulsive move.
4-Hour Chart and Consolidation Features
On lower timeframes, BTC's consolidation is more pronounced, indicating ongoing profit realization. What initially resembled a head and shoulders pattern has evolved into a descending wedge, a typically bullish continuation pattern.
The price continues to trade within this wedge, supported by a key ascending trendline around $116K. This trendline has acted as significant support recently.
As long as the price remains within the wedge's boundaries and this trendline, a consolidation range is in play. A break below the line could trigger a deeper correction toward the $111K support. Conversely, a breakout above the wedge's upper boundary would signal the continuation of the bullish trend.
On-chain Data Analysis
On-chain data from CryptoQuant indicates a notable increase in Bitcoin reserves on centralized exchanges, reaching their highest level since June 25th. This sustained inflow reflects ongoing profit-taking and distribution by investors, a dynamic that often signals weaker buy-side pressure and hints at a potential corrective phase.
Historically, rising exchange reserves are associated with local market tops, as more BTC becomes available for potential sale. However, this metric alone should not be viewed as a definitive trigger for immediate price drops. Broader market liquidity, sentiment, and demand dynamics remain key.
Currently, despite the increase in Bitcoin reserves on exchanges, the broader market context remains bullish. Any corrective moves should be viewed within the framework of an intact long-term uptrend.
