Bitcoin was taking confident strides in early September but the collapse in the middle of the month triggered a local sell-off. It caused large volumes of coins to put pressure on the cryptocurrency price. As a result, the volatility of the cryptocurrency increased significantly, which contributed to sharp price fluctuations. BTC began a consolidation to stabilize the swing in the price. As it usually happens, bitcoin's on-chain activity noticeably decreases, trading volumes and the number of unique addresses fall during the consolidation of the price. However, during such pauses between growth and decline, there is always the possibility that market participants may put some pressure on the price. As the cryptocurrency market is shaky after negative news about Chinese sanctions, the bears may try to push the price lower.
Bitcoin's intraday technical charts can show a possible pressure on the price. Over the past 24 hours, BTC was swinging in the narrow range and did not grow. At 1:00 p.m., it is quoted at $42,200 with daily trading volumes dropping to $29 billion. It is important to pay attention to the news while conducting the primary analysis of the cryptocurrency's financial condition. Currently, the news agenda is exacerbated by Chinese giants like Bitmain which suspended selling mining equipment. In the long term, this may lead to a drop in the BTC hash rate and the emergence of failures in the network of the cryptocurrency. In addition, a complete ban on bitcoin transactions in China caused a flurry of activity on crypto platforms, which also puts additional strain on the network and is likely to cause a local collapse.
Onchain activity is the actions of cryptocurrency market players who independently dispose of their crypto-assets, which makes the record go directly to the main blockchain. This statistic includes both private investors and large companies.
Price consolidation is a period of a given cryptocurrency within a narrow horizontal price channel. Usually, this process indicates price stabilization or weakness of market participants (bulls and bears).
Hashrate is the total computational power of the mining equipment. The higher the value, the harder it is to mine cryptocurrencies as new miners are attracted to mining assets.
The 1-hour chart shows a bullish trend with a potential to break through the level of $42,300. The charts indicate the uptrend, which was formed after the bearish triangle pattern. The bullish breakout signals a further robust uptrend. The technical indicators support this sentiment and start the uptrend, indicating strong momentum for the bulls. The MACD indicator is still remaining in the red zone but it managed to cross the zero mark and now is maintaining upward momentum. The MACD also shows a possible reverse to sideways movement as the upward wave is slightly weakening. The RSI shows a similar trend, which is also moving to 50. Overall, the situation on the hourly chart indicates the price stabilization after the local growth cycle. It is likely to move to $42,000, where it may rebound if this is confirmed by the broader analysis periods.
The 4-hour chart shows a clear tendency to a flat (sideways movement), as the main indicators are moving in parallel and indicate that the bulls and bears are not ready to pull the tug-of-war. In addition, a bearish triangle has been forming in the current time frame starting from September 21. At 1:30 p.m., the price is as close as possible to its bullish breakout. There might be a major correction in the daily chart due to an additional bullish momentum. It is likely to happen because the stochastic oscillator and the RSI are in the optimal position for growth. Meanwhile, MACD is close to forming a bullish crossover, which suggests that the bulls may strengthen the bullish momentum and the price is likely to consolidate beyond the bearish triangle.
On the daily chart, BTC does not show a consistent trend, so a breakdown of the bearish patterns on narrower time frames may contribute to the growth of the price. In addition, on the daily chart, there is a pattern of the bearish triangle from September 7. The currency closed the previous two trading sessions with bearish candlesticks, so there is little chance of breaking through the bearish pattern right now. Meanwhile, the stochastic oscillator has formed a bullish cross and the RSI is moving towards 50. MACD continues a downward wave and risks forming a bullish divergence, though there are preconditions for an upside reversal. In general, bitcoin has all chances to start an upward movement at the end of the day, if the bulls manage to beat the bearish patterns.
The Relative Strength Index (RSI) is a technical indicator that allows determining the strength of the trend (downward or upward) and alerts about possible changes in the trend of a price. This metric can determine whether an asset is overbought or underbought. The optimal level for a bullish trend is 60. It indicates a high demand for the coin and the strength of the current upward momentum. When the BTC price crosses this level, it starts moving into the overbought area.
The MACD index (Moving Average Convergence/Divergence) is an indicator that allows drawing certain conclusions about the trend based on the movement of moving averages and finding metric values between them. The usual bullish signal is when the white line crosses the red line from below and the bearish signal, on the contrary, when the white line crosses the red line from above, indicating a downward movement.
Stochastic (stochastic oscillator) indicates the strength of the momentum of the current prevailing trend. If the indicator is above 80, the asset can be considered overbought, but if the stochastic oscillator is below 20, it is a signal that the asset is oversold.
A bearish triangle is a pattern on horizontal charts that suggests a continuation of the downward price movement. A bullish breakout of this pattern is a strong impulse for price growth.