Bitcoin [BTC] recently reached a peak of $106K before retracing slightly to trade around $102K at the time of this report. This represented a 2.55% decline over a day.
Prior to this correction, Bitcoin had been on an upward trend, seeing an 8.85% increase over the week. CryptoQuant’s analyst, Crazyyblock, emphasized the significance of Bitcoin staying above the $100K mark, and here’s the reasoning.
The Significance of Bitcoin Holding above $100K
For Bitcoin to stay above $100K is crucial because the profitability of current holders heavily relies on maintaining this level.
If Bitcoin fails to sustain this key psychological threshold, it could trigger panic selling or forced liquidation among traders.
This is particularly relevant for investors holding Bitcoin for 1 to 3 months, who tend to react emotionally to market shifts and adopt short-term trading strategies.
Therefore, a breach of the $100K support level might lead many of these traders to sell at a loss, potentially creating selling pressure.
Hence, Bitcoin’s ability to uphold this level will significantly influence the market’s trajectory, acting as a decisive factor for a potential upward or downward movement.
Can Bitcoin Uphold Its Positive Trend?
Despite the recent pullback, Bitcoin’s market analysis suggests that it remains in a bullish phase, with indications pointing towards a probable upward trajectory.
For instance, Bitcoin’s Taker Buy Sell Ratio at 1.12 reveals a dominance of buyers in the market, implying increased buying pressure.
This bullish sentiment is echoed by investors accumulating Bitcoin in anticipation of further price increases.
At the same time, Bitcoin is showing a strong upward momentum, as indicated by the rising RVGI and ADR. The RVGI has been climbing since forming a bullish crossover four days ago.
This uptrend signals a robust momentum shift with diminishing bearish influence. Furthermore, Bitcoin’s ADR indicates that gains are outweighing losses.
Essentially, the recent downturn appears to be a mere market correction before resuming an upward movement, as most traders remain optimistic about a potential price surge.
Consequently, if the current bullish sentiment persists, Bitcoin is likely to reclaim $105K and attempt to break through the resistance at $106K, a level that has previously seen rejection.
However, if the correction extends, there’s a possibility of Bitcoin falling below $100K, potentially leading to a further decline towards $98K.