bitcoin has recently experienced unpredictable and volatile activity, with the price action testing both psychological and technical limits. The cryptocurrency failed to surpass the coveted $100,000 mark, although it showed resilience by holding firmly above the $90,000 level. This tight range has left traders and investors on tenterhooks, closely watching a decisive move.
Amid this volatility, the broader crypto market is experiencing unprecedented demand, indicating a bullish outlook that could keep the “btc party” alive in the coming months.
However, challenges remain as key data from CryptoQuant indicates elevated risks of coin selling by current holders. This suggests potential headwinds, even as demand drives the market.
As bitcoin consolidates, the market seems primed for its next big move. Whether btc can break above $100,000 or face a deeper pullback below $90,000 will depend on how this dynamic plays out. The coming weeks will be critical as participants navigate this volatile phase and assess btc's ability to take the market to new heights.
bitcoin Shows Sell Signs: What's Different This Time?
bitcoin has been on an impressive upward trajectory since November 5, rising 50% as it approached key psychological levels, including the $100,000 mark. However, after achieving this monumental rally, btc retreated over 8%, testing critical levels of demand. Despite this pullback, the price remains exceptionally strong, supported by a solid base of new market entrants.
<a target="_blank" href="https://x.com/AxelAdlerJr/status/1863508876441641214″ target=”_blank” rel=”noopener nofollow”>According to CryptoQuant analyst Axel AdlerWhile there is a high risk of coin selling by holders (particularly those in the long-term market), the dynamics are different compared to similar situations in March.
At that time, selling pressure from long-term holders exceeded demand, causing the price of btc to retreat. However, currently demand from new entrants is effectively absorbing sales from long-term holders, mitigating downward pressure and helping sustain the bullish trend.
This suggests that btc has the potential to continue advancing, with analysts targeting levels of $100,000 to below $110,000 in the near term. However, as prices rise, the likelihood of selling pressure increasing increases, which could eventually trigger a significant correction.
In this cycle, it is not a matter of “if” but “when” bitcoin will face its first major pullback. The combination of strong demand and increasing pressure from holders looking to cash out will likely result in a healthy correction, which could serve as a buying opportunity for those looking to capitalize on bitcoin's long-term potential. The key will be to monitor how demand continues to absorb these sell-offs.
Test demand before a breakup
bitcoin is currently testing a key demand level of around $95,000, which must hold in the coming days for btc to continue its momentum towards the $100,000 mark. This price level has proven to be important for short-term strength and if it holds, bitcoin could surpass $100,000, indicating a continuation of the bullish trend.
The $95,000 level acts as crucial support on the 4-hour chart, and holding it would suggest that there is enough buying pressure to push bitcoin to new highs. However, if bitcoin fails to maintain this level, the price could come under further downward pressure, which could test demand around $90,700 or even $87,602. This latest price range aligns with the 4-hour 200 exponential moving average (EMA), a key technical indicator that often signals support areas during pullbacks.
In the coming hours, all eyes will be on this support level, as a break below $95,000 would shift the momentum to the downside. On the other hand, holding above this level could pave the way for bitcoin to surpass $100,000, continuing its impressive bull run. Price action around $95,000 will be critical in determining bitcoin's next move.
Featured image of Dall-E, TradingView chart
