Main Insights:
Bitcoin rose to $113,900 after touching weekly lows, driven by bullish divergences.
Large holders have sold 147,000 BTC since August, indicating supply pressures.
Implied volatility of Bitcoin options reached multi-year lows, suggesting a potential significant price movement.
On Wednesday, Bitcoin (BTC) made a quick rebound to $113,900 after dipping below Monday’s low of $111,500 and briefly touching $111,000 on Binance during the Asian trading hours. This bounce indicated an early attempt at a mid-week recovery, supported by emerging bullish signals on the charts.
A significant factor in this rebound is the bullish divergence between the relative strength index (RSI) and BTC’s price on the one-hour and four-hour charts. A bullish divergence occurs when prices hit lower lows while the RSI shows higher lows, often signaling diminishing bearish momentum and the potential for a reversal.
The recovery also lined up with Bitcoin retesting its daily order block, establishing a technical base for a potential push toward $115,000. However, stronger confirmation is still needed.
A four-hour candle closing above $113,400 would signal a definitive shift from bearish to bullish structure. Furthermore, reclaiming the 200-period exponential moving average (EMA) on the four-hour chart would strengthen positive momentum.
Crypto traders have shown mixed reactions to this movement. MN Capital founder Michaël van de Poppe remarked 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 excellent for upward momentum. Strong bounce.”
However, crypto trader Crypto Chase warned that Bitcoin needs to convincingly reclaim the $113,400 to $114,000 range, or the recent gains may falter, potentially driving 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 Hits Two-Year Low
While Bitcoin’s short-term recovery is strengthening, broader on-chain trends reveal mixed signals. Earlier, Cointelegraph noted that whale entities holding 1,000 BTC or more have sold about 147,000 BTC, valued at $16.5 billion, since Bitcoin’s all-time high above $124,500 in August.
The 2.7% decrease in holdings underscored persistent selling pressure from large investors, often viewed as a hindrance to price recovery.
Conversely, other market indicators suggest a rather calm market environment rather than a decisively bearish one. XWIN Research indicated that Bitcoin’s implied volatility has fallen to its lowest levels since October 2023, a phase that preceded a 325% rally from $29,000 to $124,000 for BTC.
The analysis depicted the current scenario as a possible “calm before the storm,” where low volatility and subdued trader positioning may be building momentum for a significant price move.
Supporting this perspective, CryptoQuant data highlighted that exchange reserves are at multi-year lows, reducing the number of coins available for selling. Moreover, Bitcoin’s Market Value to Realized Value (MVRV) ratio is near the neutral zone, indicating minimal pressure for either panic selling or aggressive profit-taking.
Collectively, these elements illustrated a market caught between distribution driven by whales and a structural environment of tightening supply.
Related: Bitcoin bull cycle enters ‘late phase’ as profit-taking metrics spike
This article does not provide investment advice or recommendations. All investments and trading transactions carry risks; readers should conduct their own research before making decisions.
