Bitcoin freefalls to $30,000 but recovery to $40,000 seems imminent as on-chain metrics stay strong
- Bitcoin recovery to $40,000 will not come easy despite the bounce at $30,000.
- On-chain metrics like the network growth remain strongly bullish suggesting that Bitcoin is still strong enough to reclaim the lost ground.
Bitcoin is struggling to stay afloat at $30,000 after rebounding from the fall to $30,000 on Monday. The pioneer cryptocurrency came out of the dilemma experienced early on Monday, moving closer to the primary support at $27,500.
On the upside, price action has been limited, especially due to the failure to break above the 50 Simple Moving Average on the 4-hour chart. At the same time, Bitcoin closed the day under $35,000, somehow encouraging sellers to join the market.
At the time of writing, BTC is teetering at $33,975, while bulls struggle to change the narrative towards $35,000. Trading above the 50 SMA would shift the focus to higher levels, perhaps at $40,000.
Technically, the least resistance path seems downwards and Bitcoin is likely to revisit the support at $30,000. It is vital that the buyer congestion at the 100 SMA stays put to avoid the anticipated losses.
BTC/USD 4-hour chart
Similarly, the bearish outlook is validated by the Relative Strength Index now that recovery above the midline has been unsustainable. Action toward the oversold region may call for more sell orders, which could increase the overhead pressure, forcing BTC/USD to dive back to $30,000 or the primary support at $27,500.
IntoTheBlock’s “Daily New Addresses” model highlights Bitcoin’s strong network growth. The number of new addresses topped 685,000 on January 7. A correction occurred in the last few days to 560,000 addresses per day (which is still relatively high) but recovery is underway with the unique addresses on the network standing at 575,000.
Bitcoin Daily New Addresses
Improving network growth is a bullish indicator for Bitcoin in the coming days. In other words, recovery is likely to continue as network adoption hits new milestones.
Bitcoin intraday levels
Spot rate: $34,345
Relative change: -1,151
Percentage change: -3%
Trend: bearish
Volatility: High
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