Bitcoin has initiated an explosive rally after finding support amid the $16K price level. Since then, BTC surpassed the 100-day and 200-day moving averages at $18K and $19.6K.

After a prolonged downtrend, the price breaking above the 200-day moving average is a substantial bullish sign for the market. If the bulls maintain the MA-200 level, adequate demand will likely return to the market, and the sentiment will continue in the short term.

However, there is an evident bearish divergence between the price and the RSI indicator on the daily timeframe, which might result in a need for a correction over the next days and following the rally.

The Daily Chart

The 4-Hour Chart

Professional traders use pivot points to determine support and resistance levels. Simply put, a pivot point is a level at which a price movement’s direction can start a reversal.

The following chart shows that the BTC price has recently surpassed two significant pivot points and is consolidating around the $23K level. The next crucial resistance level for Bitcoin is the next major pivot at the $25K price level, which has also been a static resistance level for the past few months.

Nevertheless, the bearish divergence is also seen in the 4-hour timeframe. There is a higher possibility that the price enters a short-term consolidation phase between the $23K and the $21K levels before spiking toward the $25K crucial resistance region.

On-chain Analysis

By Shayan

The following chart…