Over the past week, Bitcoin (BTC) finally broke out of a long-term consolidation phase, advancing above $90,000. During this time, the leading cryptocurrency traded as high as $94,700 before a sudden rejection forced prices to move within the $90,000-$92,000 range. During this small rally, a market analyst with the username OnChain identified clear signs of market weakness that support the possibility of a bear market.
Bitcoin On-Chain, Technical Indicators Consolidate To Paint A Bearish Picture
In a QuickTake post on CryptoQuant, OnChain explains that Bitcoin is showing the first signs of structural weakness on the weekly chart, similar to what will happen in 2021-2022. The analyst confirms this view by consulting a combination of price-based technical indicators and on-chain demand metrics to determine the appropriate market situation. These include: 4 Anchored VWAPs (2021 ATH, 2025 ATH, 3rd halving, and 4th half), SMA50, Guaranteed Price – UTXO Age Bands (6-12 months), and Bitcoin Apparent Demand.
The use of these indicators on the weekly chart of Bitcoin highlights the areas of the same price structure in the current market and in 2021/2022. Notably, in 1 places, as seen in the chart below, it is noticed that Bitcoin for the first time simultaneously trades below the average price from the last high (VWAP tracked), SMA50, and the price of coins stored for 6-12 months. In the previous cycle, when BTC started to fall below all these levels together, it marked the beginning of a broad weak phase, rather than a short correction.
In places 2, OnChain reports that in both cycles, Bitcoin finds support in VWAP centered on its last second low in each cycle. Following the suspension of the price correction, BTC tried to repeat the mini-rebound in 2022 but faced strong resistance in all indicators from Areas 1, before entering a multi-month decline.
According to the market analyst, the highlighted indicators in Areas 1 are currently standing near $98,000 – $101,000, which presents the next point of major resistance. Meanwhile, all of this reported price action is happening as Bitcoin Apparent Demand continues to crash suggesting an apparent lack of buying pressure. OnChain notes something about the same as Apparent Demand is also approaching negative territory, similarly in 2021-2022.
BTC Market Overview
At the time of writing, Bitcoin is trading at $90,500 following a small price drop of 0.58% in the last 24 hours. Meanwhile, its monthly loss stands at 1.9%, indicating that the bulls continue to struggle to control the markets. While there are alarming signs of growing market weakness, there are also potential positive developments. One of them is the Clarification Act, as highlighted by OnChain, the potential impact of which, after the enactment of the law, remains unknown.
Featured image from Pixabay, chart from Tradingview
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