Bitcoin has been trading within a specific range for the past couple of weeks. This period of consolidation does not seem to indicate a distribution phase, as various technical indicators and on-chain data suggest that buying pressure remains robust.
There has been minimal profit-taking activity, and there haven’t been any significant sell-offs observed.
Why Bitcoin’s Price Outlook is Positive
Looking at the daily chart, it is evident that Bitcoin has maintained a bullish structure. A recent higher low point at $90,791 needs to be surpassed with a solid daily close to avoid a bearish shift in the structure.
During the recent consolidation below the $98k resistance range, the Money Flow Index (MFI) cooled down significantly. While still indicating bullish momentum, it was hovering close to the neutral mark at 50, hinting at potential further upward movement.
Given that the Chaikin Money Flow (CMF) was comfortably above the +0.05 level, significant capital inflows were apparent – underlining a high level of demand. Recent data shows dwindling exchange reserves, dropping below levels from June 2018, signaling ongoing accumulation.
A more detailed view on the consolidation phase is provided by the 4-hour chart. It illustrates a range-bound pattern between $92k and $99.4k, with $95.7k serving as a consistent support level over the past week and a half.
A breach below $92k on the 4-hour chart could signal the beginnings of a bearish trend. However, such a move might also be a false alarm, as a quick dip below the range could be followed by a fast recovery to clear out highly leveraged long positions and overly eager short sellers.
The Attraction of the $100k Mark for Bitcoin Bulls
During Bitcoin’s recent trading within the highlighted range, a concentration of liquidation thresholds has formed around the $99.8k level. The short-term Bitcoin price forecast leans towards a bullish scenario with a potential visit to this crucial zone in the near future.
Given the clustering of short liquidations, there is a possibility of triggering a cascade of liquidations leading to a rapid surge in prices. On the downside, the $90k-$93.5k range stands as a supportive zone.
Traders are advised to brace themselves for heightened volatility as Bitcoin approaches the psychologically significant $100k milestone.
Disclaimer: The views expressed here are opinions and should not be construed as financial, investment, or trading advice.