Bitcoin’s price appeared to have stabilized when it jumped off the $28,956 open year. On-chain metrics, however, indicate that this extension was a fluke. In reality, investors with no particular volume or momentum are attempting to drive the price up on the charts.
The first indication of opposition undermined the already fragile traction of these investors, leading to the continuation of the downtrend. More of these sell-offs could be on their way for two reasons,
- On-chain indicators
- The start of the Asian session
Bitcoin’s On-chain indicators
As stated in yesterday’s post, Bitcoin was due to have the year opened for correction and re-testing. Today, on-chain metrics, more precisely CryptoQuant’s Coinbase Premium predictor, point to more declines for the market’s revolutionary cryptocurrency.
“Coinbase premium” is an on-chain statistic that is the ratio of Coinbase’s BTC/USD price to Binance’s BTC/USDT price. This ratio helps to determine whether or not BTC is trading at a premium.
High premium highlights high spot inflows and indicates that buyers continue to purchase, so it’s a bullish indicator. At the time of the news, after bouncing off the yearly low, this premium had not risen and was still negative, indicating that the sellers were still in charge of the market and that the decline had not yet been made.
CryptoQuant CEO Ki Young Ju commented on this premium too, stating,
“Was always above +$50 when BTC was about to break 20k, 30k, and 40k, meaning there were huge spot inflows from high net-worth individuals and institutional investors in Coinbase.”
Bitcoin: Technical point of view
As mentioned above, the middle-line of the parallel channel was the first sight of the resistance. Rejection here sets the market for another annual tap open at $28,956. This further supported the bearish view of the on-chain metric.
A bearish situation would be a violation of the immediate assistance number of $28,956, which will open the price to $20,000 in an exceedingly bearish scenario.
Other helps that could keep the price from slipping to $20,000 include liquidity pockets ranging from $29,800 to $27,600. Following this scale is the 50 percent Fibonacci mark at $25,850, a level that appears to be the biggest region of protection and the next destination for Bitcoin to fall.
The Asian session
Asian sessions ranging from 23:00 GMT to 8:00 GMT are when traders start dealing in the East. As a consequence, high volatility is typically observed during this period. Moreover, the Asian session is considered to be particularly bearish and most declines occur during this session.
In the light of the fact that yesterday’s decline was followed by the U.S. session, Bitcoin can be predicted to drop further as the Asian session is in full swing, further reinforcing the bearish outlook on the charts.
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