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Bitcoin has been holding above the $100,000 mark for four months, maintaining a price stability that some consider a foundation for potential returns. Bitcoin is trading at 109,500, supported by steady institutional purchases and strong retail interest. However, technological evidence indicates that momentum might be dissipating.
The On-Balance Volume (OBV) indicator, the most popular indicator in price-volume analysis, fell to its lowest level since April. It is a cumulative indicator that increases or decreases according to the prices of each day. When the trend of OBV does not follow the price movements, it is typically an indicator of a deteriorating market base or a potential shift in the trend's direction.
The decrease in OBV suggests the possibility of selling pressure despite the stable Bitcoin price. The history of such drops has been followed by market corrections, indicating that demand may not be robust enough to sustain a higher price level in the short term.
According to TradingView statistics, the OBV of Bitcoin has recently fallen below its typical range, a trend that also occurred in April when the cryptocurrency was trading at $94,000. The decline is in line with other bearish signals, such as the MACD histogram on the weekly chart, which is recording increasingly red bars below the zero line.
The cryptocurrency is now trading near a significant support at around $107,300, which was characterized by lows in the intraday in late August. A resolute action below this may pave the way to the June 22 lowest point of around $99,225.
On the positive side, Bitcoin will have to recover its 50-day SMA to indicate a fresh bullish domination. However, until this time, the traders remain on alert because trading volumes and momentum indicators continue to decline.
The recent break between price stability and volume performance indicates an increasing uncertainty in the cryptocurrency market. Despite the current state of Bitcoin trading above the $100,000 mark, indicating a high degree of long-term investor interest in the market, the decreasing values of the OBV and MACD suggest a risk of short-term correctional risks. Additionally, the nearest support level is $107,300, and the 50-day SMA serves as a resistance zone.
Also Read: Crypto Prices Today: Bitcoin Price Steady at $108K While Ethereum Dips Below $3,850
