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The price of Bitcoin has successfully climbed above the $112,000 mark, currently hovering just below $113,000. After experiencing a dip below $110,000 due to a sharp decline caused by liquidations, is there still potential for a rally?
Summary
- Bitcoin is stabilizing around the $112,000 level but needs to exceed $114,000 to initiate a rally.
- Matrixport reports that the current resistance zone is located at $109,000, indicating that BTC must stay above this level to avoid further declines.
The Bitcoin price suffered a considerable decline as mass liquidations erased nearly $110 billion from its market capitalization. A $1.5 billion liquidation event shocked the crypto market, driving BTC’s price down to as low as $111,998 before it fell further in the ensuing days.
According to analysis from Matrixport, this particular cycle for Bitcoin (BTC) is unprecedented in the market’s history. Unlike earlier phases featuring one or two bull markets, analysts note that there are now three concurrent bull markets propelling the current upward trend.
The last occurrence of multiple bull markets operating simultaneously within a single uptrend was during the 2020 to 2021 rally, which only had two such bull markets fueling the rise in Bitcoin prices.
Matrixport advises traders to closely monitor the 21-week moving average line, which acts as the boundary between bull and bear markets.
“This level is currently at $109,899. As long as Bitcoin stays above this threshold, the bull market remains viable; however, dropping below could signal the onset of a more challenging phase,” stated Matrixport in its latest report.
Bitcoin Price Analysis
Bitcoin price saw a significant drop from $117,000 to around $112,000. This decline was linked to the mass liquidation event that resulted in intense selling pressure. After reaching a low just above $111,000, the price has attempted stabilization, but momentum remains weak.
The 30-period moving average currently sits around $112,524, serving both as short-term resistance and a critical indicator for BTC’s ability to regain strength shortly. The inability to maintain levels above $114,000 earlier points to sellers dominating the market for now.
At the moment, the Relative Strength Index has rebounded from oversold zones below 30 and is approaching the neutral area around 51. This recovery suggests a cooling of bearish momentum, with buyers cautiously re-entering the market.
However, the RSI does not indicate a strong bullish divergence, suggesting that traders lack conviction. A sustainable break above 60 in the RSI would signal the formation of a potential rally.
For Bitcoin to generate a significant rally, it must break through the resistance zone between $114,000 and $115,000, which aligns with the previous breakdown area. A decisive breakout above this range could allow the asset to retest the $117,000 level.
If Bitcoin fails to reclaim $114,000 soon, it may continue to consolidate between $111,000 and $113,000. This could result in further downward movement within the cycle, leading to a drop in price. According to Matrixport’s latest analysis, BTC needs to maintain levels above $109,899 to avoid bearish conditions.
While Bitcoin has the potential for a short-term relief rally, the broader outlook hinges on the ability of buyers to push past the $114,000 level into support. Until then, the momentum leans towards cautious optimism rather than a confirmed bullish reversal, particularly if market conditions improve and BTC maintains levels above its moving average.
