Bitcoin [BTC] has recorded a slight decline of 1.08% within the last 24 hours, yet it continues to trade above the $100,000 threshold.
Despite the prevailing optimism in the market, corrective phases are considered an essential component of the overall market cycle.
Analysis conducted by CryptoCrypto indicates that a corrective stage might be on the horizon, pinpointing crucial levels that could act as a support for price recovery.
Distribution Phase Poses a Threat to BTC
The Index of Bitcoin Cycle Indicators (IBCI) on CryptoQuant suggests that the cryptocurrency has now entered a distribution zone, a level not seen since May 2024, approximately eight months ago.
Comprising seven distinct market indicators including Puell Multiple, MVRV, NUPL, and SOPR, IBCI serves as an important gauge of market sentiment.
A transition into the red region on the chart signifies a distribution phase, beginning at 75%, indicating growth potential for BTC while also signaling the commencement of selling activities.
Once all seven indicators align in their distribution phase, pushing IBCI to the 100% zone, Bitcoin would likely reach a market peak, characterized by lower highs and lows in its price action.
Currently positioned above 50%, where BTC presently resides, IBCI suggests an impending corrective phase before resuming its upward trend.
Further insights from CryptoCrypto have identified a plausible level for a rebound following a correction before the market peak is attained.
Expected Dip to Mid-$90K Range Before a Rally
Using the In/Out of Money Around Price metric to identify potential support and resistance levels, CryptoCrypto projects a demand zone for Bitcoin where a pullback may encounter buying interest supporting a continued upward movement.
This support area is identified between $94,800 and $97,000, centering around $96,500, backed by approximately 1.36 million BTC buy orders from 1.4 million distinct addresses.
If a corrective phase leads to this range, it is anticipated to be succeeded by a rapid price rebound back towards the $100,000 level, with the potential for Bitcoin to set a new all-time high thereafter.
Additional positive market dynamics, such as the accumulation of BTC in a stockpile, could further aid BTC’s upward momentum.
Potential Boost for BTC from U.S. Digital Assets Stockpile
The introduction of a U.S. digital assets stockpile, following President Donald Trump’s recent executive order on January 23, may work in favor of Bitcoin.
An inclusion of BTC in the digital stockpile suggests that the U.S. government might incorporate the cryptocurrency into its reserves.
Reports indicate that the U.S. government currently holds roughly 198,000 BTC valued at $20.71 billion, with the possibility of increasing these holdings, potentially driving demand and positively influencing Bitcoin’s price movement.