Key takeaways:
Bitcoin surged to $113,900 after testing weekly lows, driven by bullish divergences.
Whale entities have offloaded 147,000 BTC since August, indicating supply pressure.
Bitcoin options implied volatility reached multi-year lows, suggesting a potential explosive move.
On Wednesday, Bitcoin (BTC) quickly regained ground to $113,900 after briefly dipping below Monday’s low of $111,500 and testing $111,000 on Binance during the Asian trading hours. This bounce marked a preliminary attempt at recovery mid-week, backed by emerging bullish signals reflected in the charts.
A significant factor in this rebound is the bullish divergence observed between the relative strength index (RSI) and Bitcoin’s price on the one-hour and four-hour charts. Such divergence occurs when prices set lower lows while the RSI establishes higher lows, often signaling diminishing bearish momentum and potential reversal.
The recovery timeline also aligned with Bitcoin revisiting its daily order block, which serves as a technical foundation for a possible advance toward $115,000. Nevertheless, stronger confirmation is required.
A closing candle on the four-hour chart above $113,400 would indicate a definitive shift from bearish to bullish patterns. Furthermore, regaining the 200-period exponential moving average (EMA) on the four-hour chart would bolster positive momentum.
Responses from crypto traders varied regarding this movement. MN Capital founder Michaël van de Poppe acknowledged the strength of the bounce, commenting,
“Good sweep of the lows for Bitcoin and it holds up. Breaking the 4H 20 EMA would be great for upward momentum. Strong bounce.”
Crypto trader Crypto Chase warned that Bitcoin needs to firmly reclaim the $113,400 to $114,000 range; otherwise, recent gains could reverse, sending BTC back toward $107,000.
Related: Bitcoin Bollinger Bands tighter than ever as trader eyes $107K ‘max pain’
Large Bitcoin holders reduce positions as implied volatility reaches two-year low
While Bitcoin’s short-term recovery is gaining momentum, broader on-chain trends display mixed signals. Earlier, Cointelegraph reported that whale entities holding over 1,000 BTC have sold approximately 147,000 BTC, valued at $16.5 billion, since Bitcoin’s all-time high above $124,500 in August.
The 2.7% reduction in holdings signifies ongoing selling pressure from large investors, often seen as a hurdle for price recovery.
However, other market indicators imply that the broader environment remains unusually quiet instead of decisively bearish. XWIN Research highlighted that Bitcoin’s implied volatility has dipped to its lowest point since October 2023, a period prior to a 325% rally from $29,000 to $124,000 for BTC.
This analysis characterized the current situation as a potential “calm before the storm,” where low volatility and subdued trader positioning may be building momentum for a significant move.
Supporting this viewpoint, CryptoQuant data emphasized that exchange reserves are at multi-year lows, limiting the availability of coins for selling. Meanwhile, Bitcoin’s Market Value to Realized Value (MVRV) ratio remains close to the neutral zone, indicating limited pressure for either panic-selling or aggressive profit-taking.
Collectively, these elements depict a market caught between whale-driven distribution and a structural climate of tightening supply.
Related: Bitcoin bull cycle enters ‘late phase’ as profit-taking metrics spike
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.
