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Bitcoin’s recent rise above $100,000 has kept the market on edge as bullish momentum attempts to establish a new liquidity zone beyond this milestone.This push has introduced significant volatility over the past 24 hours, with Bitcoin fluctuating between $99,701 and $106,307 during this period.
This intense volatility hasallowed Bitcoin to achieve a daily close above a key confluent resistance level that had capped its price action for the past month. Despite this progress, Bitcoin continues to test the $106,000 upper boundary, and a decisive rejection at this level could trigger a downturn, potentially driving the price as low as $91,000. Bitcoin Successfully Closes Above Confluent Resistance
According to technical analysis fromcrypto analyst Rekt Capital, Bitcoin has managed a daily close above a significant confluent resistance level. This was noted in a technical analysis of the Bitcoin daily candlestick price action posted on social media platform X and emphasizes a key event in Bitcoin’s rally. The confluent resistance in question is defined by two critical elements: a horizontal resistance trendline at $101,165 and a descending trendline, which has been consistently marking lower highs since Bitcoin reached its all-time high of $108,135 on December 18, 2024. Related Reading Crypto Fear And Greed Index Barrels Toward Extreme Greed Again As Bitcoin Price Clears $101,000, Is This Good News? 3 days ago
Since breaking out of this confluence area, Bitcoin has managed to push towards $106,000, but candlestick formations are starting to reveal a slowdown in momentum. Particularly, Bitcoin has created a hammer candlestick and a doji candlestick in successive days, both of which are traditionally associated with a slowdown in momentum or potential market indecision. This suggests that the bullish momentum might be waning as quickly and opens up the possibility of a downward move to retest the confluence area it just broke out from. BTC;s uptrend hinges on key resistance level | Source: Rekt Capital on X BTC Needs To Hold Above This Level
Maintaining a position above the breakout confluence area is crucial for determining Bitcoin’s next move. As Rekt Capital highlighted, a sustained rejection at the $106,000 level could cause a downward movement to retest the confluence area, which is highlighted with the green circle in the chart above. Related Reading Bitcoin Upper Band Moves Above $105,400 – Where Price Is Headed Next 1 day ago
If Bitcoin does retest this zone, two potential scenarios could unfold. The first, and more bullish outcome, would involve a successful retest followed by a rebound at the confluence area. This behavior is characteristic of post-breakout price action, where a pullback strengthens the new support and allows the price to gather momentum for another leg upward.
Conversely, the second scenario is more bearish. If Bitcoin fails to hold above the confluence support, the cryptocurrency could face increased selling pressure and trigger a deeper correction.
According to Rekt Capital’s analysis, the next significant support levels to watch are $91,070 and $87,325. A decline to these levels would represent a substantial pullback and might reset market expectations for the short term.
Bitcoin is currently trading at $106,100. BTC trading at $107,318 on the 1D chart | Source: BTCUSDT on Tradingview.com Featured image from Unsplash, chart from Tradingview.com