Key takeaways:
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Traders anticipate a pullback in Bitcoin’s price to around $90,000; however, if the upper range decreases, there might be potential for a new high.
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On-chain data indicates that current profit levels aren’t strong enough to disrupt Bitcoin’s existing price momentum.
For much of the week, Bitcoin (BTC) has fluctuated between $104,000 and just below $105,000. Many analysts view this as a resistance zone; others think it simply reflects consolidation within a bullish flag pattern.
A bull flag is a continuation pattern marked by sideways price movement following a significant upward trend, before either resuming the upward trajectory or breaking past trendline resistance.
The trading range of these flags is often seen as indecision among buyers and sellers; in this case, the main reason seems to be a scarcity of purchases. The chart from trdr.io shows that the sharp rise in Bitcoin from $74,400 to $105,900 was paired with substantial margin market liquidations and strong spot volumes, alongside a massive inflow into spot BTC ETFs.
In recent weeks, multiple companies from the U.S. and abroad have announced intentions to purchase Bitcoin and integrate BTC into their financial strategies. The cumulative volume delta for spots and futures, along with open interest metrics, shows that traders are positioning themselves near the upper range. Yet, fresh long positions remain limited, with bids being filled at lower levels within the bull flag support.
Bitcoin’s recent cooling-off period is typical after a nearly 40% recovery that started on April 8th. There’s an expectation for some loss of upward momentum as profits are realized in the futures market at the current range.
Data from GlassNode, which tracks short-term holders, supports this view. They noted that while profit realization has surged among short-term traders, there remains significant potential for price movement that doesn’t break statistical norms.
“Recently, short-term holder profits have surged beyond the 90-day average and reached nearly +3 standard deviations, indicating a significant increase in profit taking.”
Bitcoin needs to test its fundamental support levels before attempting any upward movement.
As BTC made its move, most sell-side liquidity was absorbed around $105,000, leading some analysts to suggest that the next target could be a test of support between $100,000 and $90,000.
The Material Indicator on Bitcoin’s market liquidity noted that except for serious catalysts, a support test near $10,000 is on the radar, with purchase orders stacked and bids appearing low.
In discussions with analyst Daan Crypto Trades on X, it was mentioned that Bitcoin prices seem stagnant at their record highs as stocks rally, following a significant bullish trend influenced by developments like the U.S.-China trade agreement.
“$90,000 remains my key level due to spot exposure,” the analyst remarked, expressing a ‘cautiously bullish’ sentiment at prices above $90,000, though this hinges on short-term movements in the U.S. stock market.
“If inventory turns and gets too expensive, one wouldn’t be surprised to see a brief downturn. Given recent shifts of 30% to 50% in inventory over a month, that wouldn’t be surprising at all.”
This article is not investment advice. All trading activities involve risks, and readers should conduct their own research before making decisions.
