Bitcoin Price Trends Signal Potential for Rally Amid Profit-Taking

Traders expect Bitcoin to possibly pull back to $90,000, with ongoing discussions of a bull flag potentially signalling a rise to new price highs. Current profit-taking is viewed as weak, suggesting BTC’s momentum could continue. Analysts are eyeing key support levels before a significant rally.

Bitcoin is in an interesting spot, traders are eyeing a potential price pullback to between $90,000 and $100,000. However, discussions around a bull flag might signal an impending rally to new price highs. Analysts are saying that the current profit-taking around the upper range isn’t strong enough to completely halt Bitcoin’s momentum, hinting that something bigger may be on the horizon soon.

For much of the week, Bitcoin (BTC) has been hovering around $104,000 to $105,000. Many analysts regard this as a resistance zone, but there’s an alternative theory suggesting that BTC is merely consolidating within a bull flag. A bull flag is a technical pattern that typically occurs after a steep rise in price. In this case, it’s followed by sideways movement. When this pattern confirms or breaks above the trendline, it usually suggests that the uptrend could continue.

In this context, the price action reflects a struggle as buyers and sellers try to find some common ground. However, the main issue seems to be the lack of buy volume in the market. Data from TRDR.io reveals that Bitcoin’s surge to $105,900 from $74,400 was driven not just by increasing prices, but also by significant liquidations in margin trading and impressive spot volumes. Notably, this coincided with several billion-dollar in-flows from spot Bitcoin exchange-traded funds (ETFs).

During that surge, multiple companies in the US and abroad have indicated interest in acquiring Bitcoin, and even building BTC treasuries. Nevertheless, the cumulative volumes for spot and futures markets show traders have been selling when BTC hits the high end of its current range, and new long positions remain underwhelming. Drops to the lower range appear to attract buyers, yet the use of margin for new positions is still limited.

Bitcoin’s recent cooler period seems like a typical outcome following a hefty 40% rise that kicked off back on April 8. It is expected that the current profit-taking in futures markets around this high point is a usual development. Further backing this view, data from Glassnode, which monitors on-chain activity, indicates that while short-term holders are taking profits, the levels do not surpass statistical norms, suggesting room for more upward movement.

A notable spike in Short-Term Holder (STH) Realized Profit has reached nearly +3 standard deviations above its 90-day average, hinting at an increase in profit realisation. Historically, during previous surges, this has often scaled up to over +5 standard deviations. This suggests that significantly stronger profit-taking pressures are usually needed to counterbalance the demand from inflows.

Now, some analysts reckon that Bitcoin might need to test support levels before any significant upward movement towards new highs. As BTC absorbed a lot of sell-side liquidity near the $105,000 point, there’s speculation that a dip to around $100,000 to $90,000 could be on the cards. The market liquidity resource, Material Indicators, mentions that without a major catalyst, BTC may be eyeing a support test at $100,000, with order book dynamics supporting this.

Analyst Daan Crypto Trades shared insights on social media, noting that many bullish and bearish factors affecting Bitcoin’s pricing have “cleared up.” He observed that while BTC is stuck near its all-time high, broader stock markets have been on the rise following the US-China trade deal facilitated by President Trump. Daan views $90,000 as a critical long-term threshold; though he remains “cautiously bullish,” he acknowledges it’s dependent on short-term performances in equity markets.

In summary, a short-term dip wouldn’t be surprising if stock prices were to retrace slightly, especially given how some equities have recently experienced considerable fluctuations. Still, it remains a wait-and-see scenario for Bitcoin traders as they navigate through these fluctuations.

Disclaimer: This article does not offer investment advice. Trading cryptocurrencies involves risks, and readers should be diligent in their research before making any investment decisions.