The past week has been eventful for Bitcoin (BTC) holders after a historic price surge above $100,000 was accompanied by a sudden collapse of nearly 7% that took the asset’s price to $92,000 early Friday.
Fortunately, BTC found some stability resulting in a gradual return to the $100,000 area. Amid this price recovery, some market indicators are confirming to investors the strong bullish structure of Bitcoin.
Bitcoin liquidations do not affect prices in the long term but consolidation is getting closer
In a Quick post On CryptoQuant, an analyst with the username Percival shared some market insights on Bitcoin’s future movement following the recent market loss.
According to Percival, many traders expected Bitcoin to reach $100,000 as a main target, with others eyeing $200,000. However, market volatility at $100,000 looked “very hot” as funding rates notably reached a temporary peak of 70%, before falling to 15%.
Amid this chaos, long-term traders opened significantly large positions against a strong resistance level at $100,000 supported by high sell-side liquidity. Bitcoin’s sudden collapse below $93,000 led to a massive liquidation of these long positions resulting in a loss of $277 million.
Following this bearish event, Percival noted that the weekly Bitcoin Market Force Index was at 28, indicating weak upward momentum and the need for price consolidation. However, on the monthly time frame, BTC remains in a strong position to maintain its uptrend but will also require time to recharge.
To support these predictions, the analyst also points to the Volatility Index (CI), a trading tool to measure whether a market is trending or consolidating. A low CI as seen in the Bitcoin market indicates consolidation.
Interestingly, Percival mentions that the 2020/2021 bull cycle saw a consolidation phase of around 20 days and that all price consolidations since March 2024 were also over a similar duration. However, the analyst focuses on the positivity of this potential consolidation, saying: “The more consolidation, the greater the upside.”
The realized price of Bitcoin STH shows a target of $120,000
Regarding future price targets for Bitcoin after the merger, Percival explains that the price achieved for short-term holders currently indicates key future resistance levels. The first of these levels is the $110,000 price area which represents resistance near +1.5 standard deviation above the achieved price, making it an area where many traders may make profits.
If the upward pressure proves to be sufficient, Bitcoin price is expected to rise to $120,000 which represents a psychologically stronger resistance level and may require further consideration for a breakout.
At the time of writing, Bitcoin continues to trade at $100,090 after rising 3.02% in the past day.
Featured image from CNN, chart from Tradingview
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