Key takeaways:
Bitcoin surged to $113,900 after hitting weekly lows, driven by bullish signals.
Whale entities have offloaded 147,000 BTC since August, indicating supply pressure.
Bitcoin options implied volatility reached multi-year lows, suggesting a potential breakout.
Bitcoin (BTC) made a rapid rebound to $113,900 on Wednesday after dipping below Monday’s low of $111,500 and momentarily testing the $111,000 level on Binance during the Asian trading session. This bounce marks an initial attempt at a mid-week recovery, backed by new bullish indicators on the charts.
A major factor behind the bounce is the bullish divergence between the relative strength index (RSI) and BTC price observed in the one-hour and four-hour charts. Bullish divergence occurs when prices make lower lows while the RSI registers higher lows, typically indicating weakening bearish momentum and a potential reversal.
This recovery also aligned with Bitcoin retesting its daily order block, serving as a technical platform for a potential move toward $115,000. However, stronger confirmation is needed.
A four-hour candle closing above $113,400 would indicate a clear transition from bearish to bullish structure. Additionally, reclaiming the 200-period exponential moving average (EMA) on the four-hour chart would further strengthen positive momentum.
Crypto traders had mixed reactions to the move. MN Capital founder Michaël van de Poppe commented on the strength of the rebound, stating,
“Good sweep of the lows for Bitcoin and it holds up. Breaking the 4H 20 EMA would be great for upward momentum. Strong bounce.”
On the contrary, crypto trader Crypto Chase warned that Bitcoin needs to reclaim the $113,400 to $114,000 range convincingly; otherwise, recent gains could fade, pushing BTC back toward $107,000.
Related: Bitcoin Bollinger Bands tighter than ever as traders eye $107K ‘max pain’
Major Bitcoin holders reduce positions as implied volatility falls to a two-year low
While Bitcoin’s short-term recovery gains momentum, broader on-chain trends reveal contrasting signals. Earlier, Cointelegraph reported that whale entities holding 1,000 BTC or more 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% drop in holdings underscored ongoing selling pressure from large investors, often seen as a headwind for price recovery.
Nonetheless, other market indicators suggest a generally quiet environment rather than decisively bearish. XWIN Research noted that Bitcoin’s implied volatility has fallen to its lowest levels since October 2023, a period that preceded a 325% rise from $29,000 to $124,000 for BTC.
The analysis characterized the current situation as a potential “calm before the storm,” where low volatility and subdued trader positioning may be generating momentum for a significant move.
Supporting this perspective, CryptoQuant data underscored that exchange reserves are at multi-year lows, revealing fewer coins available for sale. Additionally, Bitcoin’s Market Value to Realized Value (MVRV) ratio sits near the neutral zone, suggesting limited pressure for either panic-selling or aggressive profit-taking.
Together, these elements illustrated a market balanced between whale-driven distribution and a structural backdrop of decreasing supply.
Related: Bitcoin bull cycle enters ‘late phase’ as profit-taking metrics surge
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.
