The current price situation of Bitcoin indicates weakened bullish sentiment as it approaches the resistance level of $111K. While market participants still anticipate a breakout, a renewed influx of demand is necessary for sustained growth.
Technical Analysis of Bitcoin
Bitcoin continues to face challenges in surpassing the key resistance level of $111K, its current all-time high. After several weeks of consolidation, multiple attempts to break above have been met with selling pressure and profit-taking, leading to sideways price action. Recently, the cryptocurrency dipped below the $100K support zone, triggering a liquidity sweep and collecting the fuel for a potential new leg up. However, the subsequent rebound has stalled around the $107K mark, signaling weakening bullish strength. If demand returns and buying pressure increases, a breakout above the ATH could happen. Otherwise, another rejection is likely, pushing the price back towards the critical $100K support.
4-Hour Chart Dynamics
On a lower timeframe, Bitcoin has been forming a bullish flag just below its all-time high, a pattern typically signaling continuation of the existing uptrend. Following a liquidity grab beneath the lower boundary of the flag near $100K, Bitcoin rallied towards the upper boundary at $107K. Despite this upward move, the price has entered a low-volatility phase, indicating a loss of momentum as it approaches resistance. Should a breakout occur early next week, a new all-time high is likely. Conversely, failure to hold above the current level could trigger another drop, sending the price back towards the lower end of the flag.
On-chain Data Analysis
On-chain data from CryptoQuant reveals a sharp decline in Bitcoin reserves held on centralized exchanges, now at their lowest levels in several years. This ongoing outflow underscores a growing preference for self-custody and accumulation among investors, a pattern typically associated with reduced sell-side pressure and a long-term bullish outlook. A lower supply of readily available BTC on exchanges often sets the stage for potential supply-side shocks during periods of renewed demand. That said, while dwindling reserves are historically correlated with major bull runs, they should not be viewed as immediate catalysts for short-term price rallies. Market conditions and liquidity dynamics still play a vital role, and without a corresponding uptick in demand, price corrections remain a possibility. In summary, the exchange reserve trend highlights strong foundational support for Bitcoin, but near-term price action may still be subject to broader macro or technical headwinds.
In conclusion, the current price action of Bitcoin demonstrates a complex market situation. While technical analysis points to possibilities for a breakout, decreasing reserves on exchanges and the overall market may impede short-term growth.
