Bitcoin Faces Resistance, Uncertain Path Ahead as Trend Struggles to Break

Author : Elisabeth Louise | Published On : 13 Jan 2024

Bitcoin Struggles with High-Timeframe Resistance, Signaling Market Challenges Bitcoin is facing difficulties in sustaining levels above high-timeframe resistance, indicating a challenging phase in the market dynamics. Despite an upward trend in the 4-hour Exponential Moving Averages (EMAs), the cryptocurrency encounters pivotal resistance around the $47,000 to $48,000 range.

The recent market movements suggest potential early distribution stages, with significant selling occurring at higher levels. Bitcoin's attempts to break above high-timeframe (HTF) resistance, specifically the Point of Control (POC) represented by the orange line in volume profiles, have been unsuccessful. The price oscillates within a familiar range, following the same volume profile.

Cryptocurrency trader and analyst Skew shared insights into Bitcoin's recent market actions in a post, emphasizing the challenges faced by the cryptocurrency:

  • The 4-hour EMAs indicate an uptrend, but the failure to hold above key resistance levels raises concerns.
  • The $45.6K to $45.3K zone is crucial for determining the trend's direction, defended against multiple attempts to breach HTF resistance.
  • Clear signs of absorption around the $47K to $48K range suggest the early stages of distribution, though the overall market structure remains intact.
  • Reclaiming and holding above $47.1K is essential for the bulls to sustain the trend.

Despite recent surges pushing Bitcoin into the $48K to $49K range, encounters with significant spot supply and HTF resistance have prevented it from sustaining higher levels. Rallies costing around $48K have faced substantial spot selling, leading to absorption and subsequent distribution.

Coinbase Spot played a role in pricing the recent BTC Spot ETF approval and trading launch, coinciding with a high point. Persistent limit selling and absorption of buyers around the $49K mark occurred during this period. Rejections at HTF resistance in the derivatives market have been observed, coinciding with substantial market buying potentially driven by FOMO. However, spot limit selling has absorbed these purchases, resulting in a reversion back to the rally's origin.

Profit-taking during the Asian trading session and significant limit selling around the US market close on Coinbase have been noted. Traders are advised to consider de-risking exposure in the next upward movement, especially during the upcoming US session.

Bitcoin's current price stands at $45,920, reflecting a slight 0.40% decrease over the past 24 hours. Despite this uncertainty, Bitcoin maintains its top position on CoinMarketCap with a market capitalization of approximately $899 billion.