BTC Puts $38K to the Test but are Bears Staging a Serious Correction? (Bitcoin Price Analysis)

Bitcoin’s price has been bullish since the beginning of the year, consistently making higher lows and highs. Therefore, investors might be wondering whether a correction is likely to occur in the short term or if the current trend would be sustained.

Technical Analysis

By Edris

The Daily Chart

As the daily chart depicts, the price has been demonstrating strong bullish momentum over the recent months. Yet, the market is currently testing the $38K resistance level and is yet to break convincingly.

If a bullish breakout occurs, there would be little resistance preventing the price from reaching the next key level, which is located around the $41K mark.

However, with the relative strength index showing a clear bearish divergence between the recent highs, there is also the possibility of a pullback in the coming weeks. In this case, the $34K and the $30K levels would be potential targets.

Source: TradingView### The 4-Hour Chart

Analyzing the 4-hour timeframe can provide a more clear view of recent price action. It is evident that the price has been forming a rising wedge pattern in the last couple of weeks. With the rising wedge being a bearish reversal pattern and considering the fact that a strong resistance level is present around the $38K mark, there is a considerable likelihood for a correction.

However, if the pattern is broken to the upside, which might happen in the coming days, the price could go parabolic again and rapidly surge toward the $41K area.

Source: TradingView## On-Chain Analysis

By: Edris

Bitcoin Active Addresses

Bitcoin’s price has been rallying consistently over the last few months, and many heads are again turning toward the crypto market. Meanwhile, analyzing the underlying fundamental metrics of the network would provide useful insight for optimal investment decision-making.

This chart demonstrates the Bitcoin active addresses metric, which counts the total number of unique active addresses, including both senders and receivers. As the chart depicts, this metric has been on the rise since the price rebound from the $16K zone back in November last year.

Source: CryptoQuantMoreover, the number of active addresses is approaching its all-time high of over 1.1 million, which was last witnessed when the price was hovering above $60K in 2021. As a result, there is a clear bullish divergence between network activity and the price, and a bullish continuation could be expected in the coming months if this trend continues.