Bitcoin (BTC) surged 5.81% on Tuesday, marking its most significant daily gain since May 8. As this rally progressed, a bullish engulfing pattern emerged, indicating the first notable structural change on the daily chart for the fourth quarter. Traders are now questioning whether this signals a greater likelihood of a sustained recovery in the near term.
Key takeaways:
Bitcoin formed a bullish engulfing candle with its strongest daily increase since May, suggesting early trend growth.
A closing price above $96,000 is necessary for full bullish confirmation.
Buy-side trading hit its highest level of the entire bull market, as the Coinbase Premium turned positive.
Bitcoin structure shows improvement, but major confirmation is above $96,000
BTC’s rise on Tuesday established a clear pattern of higher highs and higher lows following Monday’s liquidity sweep below $84,000, suggesting sellers are losing traction. The breakout was accompanied by robust volume, indicating demand rather than merely a stop-loss hunt.
Volume-driven breakouts generally provide cleaner follow-through because they reflect active participation from buyers, rather than just passive market makers.
A bullish break of structure (BOS) above $92,300 is currently forming. A confirmed BOS would decisively shift the short-term trend upward, even if BTC briefly retraces to the fair value gap (FVG) between $90,000 and $88,000 while continuing its upward trajectory.
The daily chart still lacks full conviction until Bitcoin closes above $96,000. This level is vital as it signifies a BOS on the higher time frame. Surpassing it would affirm a complete shift in trend structure, moving beyond a mere relief bounce.
Once $96,000 is reclaimed on a daily closing basis, BTC’s immediate target zone expands toward $102,000–$107,000, where significant external liquidity is available. This range includes prior swing highs, unmitigated stop-loss areas, and liquidity from breakout traders above previous resistance levels.
In terms of market structure, these zones can act as magnets; a decisive breakout clearing the final barrier, in this instance, the $96,000 level.
Related: Bitcoin adds $732B in new capital this cycle as market structure transforms
Aggressive buy-side flow and improving premium support recovery
Data from CryptoQuant showed that the market buy-to-sell ratio surged to 1.17, its highest level since the cycle commenced in January 2023. Such strong buy-side dominance typically indicates the start of expansion phases when structural flows increase.
Meanwhile, the Coinbase Premium Index rose to a positive value of +0.03 after enduring weeks of US selling pressure. Historically, positive premium readings indicate renewed institutional investor demand. Spot and perpetual volumes on Binance are also rising concurrently, and the price gap between Binance and Coinbase has narrowed, suggesting healthier global liquidity.
Related: Bitcoin Bollinger Bands repeat ‘parabolic’ bull signal from late 2023
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
