Bitcoin price: Bearish On-Chain Activity Curbs Gains

Summary:

Bitcoin price has pulled back from Monday's high of over $40,000 to around $37,000 as on-chain activity remains rather quiet and bearish.

Bitcoin price has pulled back from six-week high of 40,597.93 it hit in the previous session. Recovery of the market sentiment helped the crypto rebound after dropping below 30,000 in the previous week. On Tuesday, the fear and greed index was at 32, which is significantly higher than last week’s extreme fear level of 17.

However, a decline in the crypto’s trading volume has curbed its gains. On Sunday, Santiment’s tweet indicated that the daily trading volume was around its lowest level since October 2020. Besides, in its weekly on-chain report, Glassnode has indicated that on-chain activity is rather quiet and somewhat bearish.

BTCUSD technical outlook

After hitting its highest level since mid-June at 40,597.93 on Monday, Bitcoin price has pulled back to consolidate at around 37,000. At the time of writing, the leading cryptocurrency was trading at 37,178.35 at 0.30%. The recent pullback represents a drop of about 8.28%.

On the one hand, it has surged by about 27.03% over a span of one week. However, it remains significantly below its record-high in mid-April, having dropped by about 42.56%. On a two-hour chart, it is above the 25 and 50-day exponential moving averages.

In the near term, I expect Bitcoin price to remain range-bound between 36,000 and 38,000. Above that level, the bulls will be seeking to retest Monday’s high of 40,597.93. On the flip side, a move below the horizontal channel’s lower border at 36,000 will place the support level along the 50-day EMA at 35,542.50 or lower at 34,000.