Buying pressure bolsters Bitcoin at $112K; potential for further growth to $120K in the current week?
In recent days, Bitcoin has experienced a 1.88% drop over the weekend, dipping to retest the $112k demand zone. This price action has sparked discussions about a potential trend reversal, with several indicators pointing towards a shift in the market.
One of the most notable signs is the failure of Bitcoin to break above critical resistance zones around $114,000 to $115,000. This is evident in the lower-high, lower-low patterns and the failure to clear moving averages such as the 100-hour Simple Moving Average (SMA). This sustained short-term bearish pressure suggests that whales, or large holders, may be selling to realize profits, contributing to the downward pressure on price.
The liquidation heatmap also argues that Bitcoin might have made a local bottom, with the magnetic zone at $112k-$114k having been swept. However, it's important to note that the market structure remains bearish on the 4-hour timeframe.
Negative momentum indicators, such as the MACD histogram turning negative and the Relative Strength Index (RSI) moving out of overbought territory, also indicate a reduction in buying strength and room for a short-term pullback or correction.
Furthermore, the Bitcoin futures open interest net position moving towards zero or neutral territory suggests traders might be less confident about immediate upside and hedging against potential declines. Decreasing trading volume during rally attempts and waning speculative appetite, as evidenced by futures premiums dropping below 7%, highlight weakening buying interest.
Interestingly, the spent output age bands showed that the 1-day to 3-month-old coins had a flurry of movement over the past two days, as prices fell to the $112k region. This suggests that medium-term holders did not participate actively in the recent selling, especially compared to earlier in the month.
It's worth noting that Bitcoin did not visit every liquidity pocket during this period, as seen at the end of June, where BTC collected the liquidity at $99.8k and jumped higher instead of falling further to $97k.
The current price of Bitcoin is 1.6% higher than the $112k support level, and the fear and greed index dropped sharply on the first two days of August. However, it's important to remember that a similar scenario could unfold over the coming days, with the highs at $120k remaining a likely price target.
In summary, the combination of failure to break through resistance, whale profit-taking, bearish momentum signals, cautious futures positioning, and decreasing volume serve as the main indicators suggesting a potential trend reversal or near-term weakness in Bitcoin’s price. Traders are advised to watch for a possible pullback or consolidation phase before a new upward move.
- The failure of Bitcoin to break above the $114,000 to $115,000 resistance zones on Solana's technology-driven crypto market could indicate a potential trend reversal.
- The liquidation heatmap suggests that Bitcoin might have made a local bottom at the $112k-$114k demand zone, but the 4-hour timeframe market structure remains bearish.
- Negative momentum indicators such as the MACD histogram turning negative and the RSI moving out of overbought territory indicate a reduction in buying strength, potentially leading to a short-term pullback or correction.
- Whales, or large holders, may be selling to realize profits in the current sports-like competitive Bitcoin market, contributing to the downward pressure on price, as evidenced by the Bitcoin futures open interest net position moving towards zero or neutral territory.
