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Bitcoin has seen a whirlwind of volatility after hitting an all-time high of $93,483 on Wednesday. Over the past few days, the price has oscillated between this record high and the low of $85,100, indicating the possible start of a consolidation phase before the next major move. Traders and investors are now closely watching whether Bitcoin will stabilize or continue its upward trajectory.
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Key data from CryptoQuant suggests that selling pressure may be increasing rapidly, driven primarily by speculative traders looking to make quick profits. However, this does not necessarily mean a problem for Bitcoin’s bullish momentum.
Analysts expect that much of the selling pressure will be absorbed by the growing demand for Bitcoin ETFs, which have gained significant traction among institutional investors.
This balance between short-selling and institutional accumulation could pave the way for Bitcoin’s next move. With volatility expected to continue in the coming days, market participants are eagerly watching signals that may indicate the direction of Bitcoin price movement. Whether this phase triggers a deeper correction or pushes Bitcoin towards new highs, one thing is clear: Bitcoin continues to dominate the financial landscape with its dynamic performance.
Strong demand for Bitcoin supports bullish price action
Bitcoin price action has been impressive, rising 38% over the past 10 days. This rapid rise has caught the attention of many investors, reaffirming the growing strength of demand for Bitcoin.
Fundamental data from CryptoQuant analyst Axel Adler It provides insight into current market dynamics, highlighting that Bitcoin is trading above its short-term cost to holder (STH) basis of $69,000. This level represents a crucial support threshold for those who have been holding Bitcoin in the past few months, indicating strong demand above this price.
In addition, the MVRV (market value to realized value) ratio is 1.3, indicating that Bitcoin is still profitable. However, Adler points out that if this ratio exceeds the 1.35 mark, it could lead to selling pressure from short-term speculators looking to take profits.
While this may lead to some market volatility, it is important to note that most of these coins are expected to be absorbed by growing institutional demand, particularly through Bitcoin exchange-traded funds (ETFs).
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This data points to a major shift in Bitcoin’s rally – rather than being fueled by speculative futures trades, the recent rally appears to be driven by strong spot demand. Spot demand typically reflects a more sustained and stable price movement than the volatility often seen in futures-driven rallies.
As Bitcoin continues to trade above key support levels, the outlook remains bullish, driven by a healthy balance between speculative trading and long-term institutional interest.
BTC Technical Supply: Prices to Watch
Bitcoin is trading at $89,240, reflecting a 7% rebound from its all-time high of $93,483. The price settled below this level after a period of strong upward momentum that pushed it into the price discovery zone.
This temporary market pause allows the market to stabilize and test key support levels before determining its next move.
During this consolidation, the $85,000 level emerged as a crucial support level. If Bitcoin can hold above this level in the coming days, it could provide the basis for another rally, which could challenge the $90,000 resistance level and retest its all-time high. A successful retracement of $90,000 would signal renewed bullish momentum, paving the way for further price expansion.
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However, failure to hold the $85,000 support level could lead to a deeper correction. In this scenario, Bitcoin will likely seek a lower level demand, with $82,000 emerging as a major area of interest for buyers.
As the market goes through this critical phase, traders and investors will be closely monitoring the price action for signs of either a breakout or pullback, as both scenarios carry implications for Bitcoin’s short-term trajectory.
Featured image by Dall-E, chart from TradingView
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