Bitcoin's price is showing signs of bullish continuation. But is the consolidation phase over or is this a temporary bounce?
Technical Analysis
On the daily chart, BTC has been consolidating below the 200-day moving average. However, today's price action suggests the consolidation period might be over, as the daily candle has broken through the 200-day moving average and the $64K resistance level. If the daily candle closes above these levels, investors might anticipate a rally towards $68K in the short term.
4-Hour Chart Analysis
The 4-hour timeframe also shows a completely bullish market structure. The price has finally broken the large bullish flag it has been trapped in for the last few weeks. A breakout from a flag pattern is a clear continuation signal based on classical price action. Therefore, if this breakout proves valid and the price holds above the $64K level, the $68K resistance zone would be a feasible target.
On-Chain Analysis
While Bitcoin’s price shows a desire to continue its long-term bullish trend, the futures market sentiment also points to an increase in optimism. The chart demonstrates the BTC funding rates metric, measuring whether buyers or sellers are executing their perpetual futures orders more aggressively. Positive values indicate bullish sentiment, while negative values are associated with bearish expectations. As the chart suggests, funding rates spiked significantly today, as the market is on the verge of breaking above a key resistance level. However, a sudden surge in funding rates might lead to a long liquidation cascade, which could halt the market’s rally.
Despite the positive signals, engaging in the current rally requires caution due to potential long liquidation cascades and other market factors.