The cryptocurrency landscape is once again buzzing with activity as Bitcoin aims to surpass the $90,000 mark. Bulls are cautiously optimistic, though the market remains fraught with uncertainty. After a tumultuous period characterized by significant volatility and selling pressure, the recent stabilization offers a glimpse of potential upward momentum. Analysts are now focusing on structural indicators that indicate a possible shift in the market dynamics.
One notable expert, on-chain analyst Axel Adler, recently pointed out that Bitcoin’s current market conditions illustrate tactical upside potential, especially when incorporating a combination of market indicators and derivatives liquidation trends.
According to Adler, Bitcoin’s Regime Score has entered the promising +15 to +30 range, a level historically associated with positive returns. This range signals a phase where downward momentum is decreasing, yet investor enthusiasm remains subdued, creating fertile ground for significant gains.
Furthermore, the derivatives market is witnessing a notable trend. There has been a clear prevalence of short liquidations, indicating that recent price movements have compelled bearish traders to exit their positions. This phenomenon generates additional buying pressure that could amplify price hikes, even amid a lack of robust demand in the spot market. Thus, Bitcoin’s quest to reclaim the $90,000 level appears to be grounded in a strengthening internal market dynamic.
Indicators Suggest a Tactical Advantage for Bitcoin
Axel Adler elaborates that Bitcoin’s composite Regime Score is a composite measure that synthesizes various market factors, such as taker imbalance, open interest pressure, funding rates, and ETF flows. This comprehensive framework is designed to assess long-term market structure rather than be swayed by fleeting price movements.
The current Regime Score is recorded at +16.3, placing Bitcoin firmly within the neutral zone, specifically between +15 and +30. Historical data from backtests also reveal that this segment has led to average returns of +3.8% within a 30-day timeframe, a stark contrast to the negative average of -1.5% seen when the score hovered between -15 and 0. The recent rebound from a bearish low of -27 further emphasizes a potential structural recovery.
It’s also important to note that transitions to a bull regime typically happen above the +30 threshold, often coinciding with local market tops. This adds a layer of complexity, making the current range more attractive for strategic positioning without the elevated risks associated with aggressive accumulation.
Supporting this perspective, data reveals that the long/short liquidation dominance oscillator is currently at -11%, illustrating a surge in forced closings of short positions while the 30-day average remains positive. With a long liquidation dominance of just 44%, short liquidations dominate, providing further momentum for upward movement.
Key Support Levels Amid Market Volatility
Currently, Bitcoin hovers around the crucial $90,000 mark following a significant correction from previous highs. Analyzing the charts indicates that the market is at a pivotal inflection point. After breaking down from the $105,000-$110,000 range, Bitcoin has struggled to regain momentum, falling below critical moving averages.
These moving averages have shown a downturn, signaling a loss of momentum and suggesting a shift toward a more cautious market state.
Remarkably, Bitcoin is stabilizing slightly above the psychologically significant $88,000-$90,000 level. This area, which has served as a reaction point in recent trading sessions, aligns with earlier consolidation efforts and represents a crucial support cluster. Evidence suggests that selling pressure is easing, as the most intense downtrends appear to have run their course, resulting in consolidation rather than continued declines.
What’s more, the long-term moving average remains well below the current price, indicating that Bitcoin is still above broader trend support. This scenario reduces the chances of immediate declines unless the $88,000 floor is decisively breached. Volume metrics are also indicating a tapering off from the peak sell-off, hinting that panic-induced liquidations may be diminishing.
In this context, Bitcoin seems to be shifting from a volatile downtrend to a more stable phase. Successfully maintaining above the $90,000 threshold may boost prospects for a relief rally. Conversely, slipping below this support could lead to deeper retracements and further bearish sentiment.
