Bitcoin incurred a sharp rebound from its lows recently, but on-chain indicators are signaling weakness. Over the previous few days, the benchmark cryptocurrency has been heavily volatile as it plunged to lows of $8.9k yesterday, prior to a rebound to the mid-$9k area.
Its performance is part of consolidation recorded over the past few months as it struggles to secure decisive momentum in either direction. Its recent rally to highs of $10.5k reveals strength while a few major factors are making it to flash signs of technical weakness.
At press times, the price of Bitcoin was up by about 1 percent at price levels around $9,466. Its performance over the previous several weeks has been close to this level, striving to move beneath $9k or above $10k. $9k and $10k are the lower and upper boundaries of a trading range between which Bitcoin has remained within over a multi-month period.
The bulls need to overcome the macro-barrier at $10.5k to make the trend favor them. Bitcoin has been rejected firmly at this level three times within the previous few months, and if it fails to clear it, it is a confirmation of the formation of triple top that is currently active.
Bitcoin is still troubled by certain basic technical weaknesses. According to a trader recently, the momentum recorded yesterday will not be sufficient to cancel its recent weakness, possibly showing that a move back down to the lower-$9k area is forthcoming.
When it comes to fundamental factors, few exist suggesting that Bitcoin is positioned for some downward momentum in the near-term. Recently, Analytics platform IntoTheBlock mentioned some metrics saying three of the four Bitcoin’s momentum indicators are bearish:
“3 out of 4 On-chain indicators are showing a Bearish Momentum for Bitcoin… Why? 1) The number of addresses going to zero is higher than the number of new [addresses] created 2)The number of transactions greater than $100k is slowing down 3)The % of addresses in the money is decreasing.”