An analysis of the current state of the Bitcoin market shows stability with a support level that shapes future price expectations.
Current Situation on the Daily Chart
Bitcoin continues to consolidate within the narrow range of $116K to $120K, marked by low volatility and subdued price action. This sideways movement indicates an ongoing equilibrium between buying and selling pressure, likely influenced by capital rotation into the altcoin markets.
A key concern is the emergence of a bearish divergence between the price and the RSI indicator, indicating a fading bullish momentum. This divergence increases the likelihood of renewed selling pressure, suggesting a possible continuation of the correction phase. In such a scenario, a move toward the $111,000 support level becomes probable.
Despite this, the broader market structure remains bullish as long as the $111,000 level holds.
Analysis of the Lower Timeframe Chart
On lower timeframes, Bitcoin is forming a bullish flag pattern, a classic consolidation formation within an uptrend. The price has consistently printed higher highs and higher lows, supported by an ascending trendline currently near the $114K level.
As long as this trendline remains intact, the market is likely to continue consolidating inside the flag. However, a breakdown below this ascending support would likely trigger a sharper pullback toward $111K, forming a key liquidity zone.
On-Chain Analysis
The latest futures order flow shows a noticeable surge in small-sized positions, indicating strong retail trader participation in the current price range. This spike reveals a high level of engagement from retail traders, particularly within the $116K-$120K consolidation zone.
Interestingly, large-scale sell-side activity, typically associated with institutions or whales, is absent. These major players are not offloading their positions, suggesting they remain confident in the ongoing bullish trend and do not expect a major reversal soon. This setup, with high retail activity and quiet 'smart money', has historically preceded major bullish moves. While the market may seem stagnant, this phase often serves as a cooling-off period before another upward leg.
The analysis indicates that the current situation in the Bitcoin market requires attention from both buyers and sellers as the support levels at $114K and $111K may determine upcoming price movements.
