Bitcoin Set To Witness Another Dip Despite Closing Above $31K?

Key Insights:

• For the first time after nine weeks, Bitcoin made a weekly close in green.
• After moving sideways for almost a month, BTC is back to test $30.7k as support.
• On-chain spending shows selling in losses in the market.

The crypto market has been struggling to find a direction in the unpredictable market since there is no directional bias either indicating an uptrend or a downtrend.

But the king coin is not giving up, and after noting a good 24 hours, Bitcoin is finally preparing to reclaim a critical zone.

Bitcoin Is Back?

After marking a local top back at the end of March, bitcoin began falling on the daily chart, and the run only ended a week ago. BTC observed a decline exceeding 40% in this duration, and the price fell below $30k once again.

Since the last week of May, the leader of cryptocurrencies has been attempting to make a move upwards and close above the 23.6% Fibonacci level. This Fib level represents significant support for the crypto that two months ago was above $48

A bounce from this level would set Bitcoin up for a good rally ahead or at least a sustained sideways momentum with a gradual incline.

However, it seems unlikely that it could happen since the price indicators aren’t exactly aligned with this narrative.

The white dots for the Parabolic SAR have run their course trying to support an uptrend, but they will not be changing positions and move above the candlesticks, signaling a downtrend.

This is because, in the while that the uptrend was active, it failed to gain enough traction to maintain its strength. This is visible on the Average Directional Index (ADX), which began losing strength towards the end of May.

Even though it was above the 25.0 threshold at the time of writing, it is barely 4 points away from dipping below it.

Once that happens, the downtrend would officially come into action.

Now, although one might confuse the green bars on the Squeeze Momentum indicator to be signals of bullish cues, the bars will soon begin declining and will eventually turn red.

This is because Bitcoin is in an active squeeze which will probably release as the king coin nears downfall.

Investors Aren’t Having Fun Either

Naturally, in a bear market, one can’t expect cryptocurrency holders to be making a profit, and the same is the case at the moment.

According to the Spent Output Profit Ratio (SOPR), most of the supply moved around over the last three weeks has been bearing losses.

The same is visible in the metric’s dip below the neutral line of 1.0, the lowest point reached since August 2021.

While the fear in the market will subside eventually, it will be a while before Bitcoin makes some significant gains owing to the broader market bearish pressure.