Bitcoin (BTC) witnessed a notable rebound, climbing to $113,900 after a brief dip below the previous week’s lows. The impressive recovery was bolstered by signs of bullish divergence emerging from trading charts, particularly on the one-hour and four-hour timeframes.
The latest movement came after Bitcoin tested the $111,500 mark, subsequently dropping to approximately $111,000 on Binance during the Asian trading hours. The bounce back marks a significant mid-week recovery attempt, indicating potential shifts in market sentiment.
One of the primary factors contributing to Bitcoin’s price increase is the bullish divergence identified between the relative strength index (RSI) and Bitcoin’s price action. This type of divergence occurs when the price records lower lows while the RSI appears to form higher lows, typically indicating diminishing bearish pressure and hinting at a possible trend reversal.
Alongside this, the cryptocurrency also revisited its daily order block, fostering a supportive technical foundation for a prospective move toward the $115,000 threshold. However, market analysts caution that confirmation is essential, with a 4-hour candle close above $113,400 being a pivotal move that could significantly boost bullish sentiment.
Despite the positive reaction in the Bitcoin market, expert opinions remain mixed. Michaël van de Poppe, founder of MN Capital, acknowledged the abrupt rise: “It’s a solid sweep of the lows for Bitcoin, and it stands strong. A break above the four-hour 20 EMA would enhance upward momentum.” Conversely, other traders, like Crypto Chase, expressed concerns, emphasizing the need for Bitcoin to reclaim the $113,400 to $114,000 range convincingly to sustain recent gains, or risk falling back to around $107,000.
On a wider scale, however, trends within the cryptocurrency’s on-chain data reflect a more nuanced picture. Recently reported by Cointelegraph, large holders—often referred to as whales—have sold approximately 147,000 BTC, valued at about $16.5 billion, since reaching Bitcoin’s all-time high of over $124,500 in August. This 2.7% decrease in whale holdings signals persistent selling by significant players, creating potential resistance against prices advancing further.
Interestingly, despite these selling activities, the market has experienced significantly low implied volatility, hitting levels not seen since October 2023. Analysts describe this low volatility as a potential “calm before the storm,” indicating that current conditions may be setting the stage for an intense price movement, much like a previous surge from $29,000 to $124,000.
Additional analysis from CryptoQuant suggests that exchange reserves are currently at multi-year lows, which translates to fewer Bitcoins available for sale. The Market Value to Realized Value (MVRV) ratio is hovering around neutral territory, indicating a balance between investor sentiment that could prevent either panic selling or aggressive profit-taking.
In conclusion, Bitcoin’s recent rise to $113,900 highlights a critical juncture in the market characterized by both bullish momentum indications and significant whale selling behavior. As traders assess the balance between these opposing forces, the path forward will depend significantly on market dynamics and underlying technical signals.
This article is for informational purposes only and does not constitute investment advice. Always conduct your own research before making financial decisions.
