As we step into the weekend, Bitcoin finds itself in a precarious situation, grappling with the challenge of surpassing its historic high of $112,000. Meanwhile, alternative cryptocurrencies, or altcoins, are experiencing mounting stress, moving to lower price points. Following a week marked by price fluctuations, Bitcoin (BTC) failed to secure a close above critical resistance levels, leading to questions regarding its potential for immediate bullish actions. Nevertheless, there is cautious optimism among market analysts, as Bitcoin remains anchored above significant support levels, and a strong performance this weekend could dramatically influence market sentiment.
Renowned analyst Daan emphasized that since the market began its recovery two weeks ago, a consistent Coinbase premium has been noted—a positive indicator often associated with increased spot buying pressure from investors in the United States. Earlier, this premium diminished amidst escalating geopolitical concerns in the Middle East but has rebounded since, reflecting a resurgence in market confidence.
Traders are now focused on the weekend’s price movements to see if Bitcoin can retake the $112K milestone and embark on a new price exploration journey, or if it will face another setback that could lead to extended consolidation periods. With key macroeconomic narratives stabilizing and on-chain metrics improving, the weekend’s developments may offer vital insights into Bitcoin’s short-term path and the potential for altcoins to regain momentum.
Bitcoin’s Tightening Range: Anticipation of a Breakout
Currently, Bitcoin is poised for an essential shift, one that could rejuvenate bullish momentum here in the crypto landscape, particularly benefiting altcoins. For the past week, Bitcoin has been consolidating within a clearly defined range between $103,000 and $110,000. Traders anticipate that a definitive breakout above this resistance or a downturn below support will incite rapid market moves, as they await validation of the next trend direction.
The larger macroeconomic backdrop appears to be shifting in favor of risk assets. With geopolitical tensions easing and US economic policies gaining transparency, conditions could align for Bitcoin to initiate a bullish phase in the upcoming months. However, risks remain. Rising US Treasury yields and persistent inflation could introduce volatility, contributing to traders’ cautious sentiment.
Daan further noted that the consistent Coinbase premium since the market rebound started two weeks ago suggests continued demand, especially from US investors. This premium, which had dipped amid geopolitical concerns, is now reinforcing positive sentiment, supported by strong ETF inflows that reflect institutional assurance.
Despite the hopeful signals, it’s vital to exercise caution. If Bitcoin fails to gain momentum while ETF investments surge, this could signal a local peak similar to previous market cycles. For the time being, as long as prices stay buoyed by robust inflows and maintain support levels above $103K, bullish sentiment prevails. A breakout surpassing $110K could unveil the potential for unprecedented highs, while a fall through support levels might initiate a swift correction, delaying broader recovery in the cryptocurrency market.
Daily BTC Chart Review: Focus on $112K Breakout
Bitcoin is operating within a significant price range between $103,600 and $109,300, just under its previous all-time high near $112,000. Observations from the daily chart indicate that Bitcoin has remained above the 50-day simple moving average (SMA), currently around $106,469, which serves as a dynamic support level during recent price corrections. This trend suggests a continual strength despite the short-term fluctuations.
The chart demonstrates that the price has encountered the $109,300 resistance level multiple times since March, but a breakout has yet to occur decisively. Volume during these attempts has been relatively low, suggesting that bullish traders may be awaiting further confirmation for a committed breakout. On the downside, $103,600 is identified as a crucial support level that historically has acted as a rebound point.
Additionally, the 100-day and 200-day SMAs, positioned at $98,544 and $96,364, are both trending upwards, further fortifying the long-term bullish thesis. A successful close above $109,300 on robust volume might unleash a price discovery phase, targeting levels around $120,000 and higher. However, any failure to sustain current price levels could lead to a retest of $100K or lower, emphasizing the importance of this range-bound phase for determining the market’s next moves.
Featured image from Dall-E, chart via TradingView.
