Key Takeaways
- Deep liquidity bids are forming between $105,000 and $100,000, indicating potential market stabilization.
- More than 90% of the Bitcoin supply remains profitable, suggesting the recent sell-off was leverage-driven rather than panic-induced.
- Reclaiming the $117,500 level could signal a shift from a correction to a breakout rally.
Bitcoin (BTC) is reportedly entering a market clean-up phase. This follows a significant deleveraging event, with substantial buy orders now observed clustering below the $105,000 mark, according to market analysts.
Trading resource Material Indicators, via its X (formerly Twitter) account, noted that order book data indicated strong sell pressure on BTC. The analysis also highlighted limited immediate technical support around the $107,000 level, suggesting that without sufficient bid liquidity, this level might only offer a brief reprieve.
Instead of immediate support, heavier concentrations of buy orders have emerged in the price range of $105,000 to $100,000. Analysts suggest that a move below $105,000 could reintroduce the yearly open price of $93,500 as a potential longer-term price magnet.
Meanwhile, blockchain analytics firm Glassnode reported that Bitcoin has begun to stabilize above its 135-day moving average following its recent correction. 💡 This stabilization is a positive sign for short-term price action.
Glassnode further explained that the Young Supply MVRV, a metric quantifying unrealized profits for short-term holders, has reset towards 1.0. This suggests a cooling of speculative excess, as newer investors are no longer holding significantly outsized profits, thereby reducing immediate selling pressure.
The current Bitcoin downturn is distinct from previous capitulation events, according to Glassnode analysis. Over 90% of Bitcoin’s circulating supply remains in profit. This indicates that most recent losses were sustained by traders who entered positions near the cycle’s peak. In contrast, previous major downturns, such as those witnessed during the collapses of FTX and Terra Luna, saw less than 65% of supply in profit, signaling widespread panic. This current correction appears to be more influenced by leveraged positions being unwound rather than a broad exodus of investors. ✅
Further supporting this view, Bitcoin analyst Axel Adler Jr. commented that the market’s reaction to the recent volatility demonstrated a mature response. While spot trading volume surged to approximately $44 billion and futures volume reached $128 billion, accompanied by a $14 billion decline in open interest, only about $1 billion of these positions were subject to forced liquidations for long positions. 📊
Adler’s assessment suggests that approximately 93% of the deleveraging was not forced. This points towards a more controlled reduction of leverage across the market, rather than a cascading liquidation event.
Bitcoin Bulls Target $117,500 Amidst Market Stabilization
With the market showing signs of stabilization, the $117,500 level is identified as a crucial resistance point for continued bullish momentum. A decisive daily close and sustained consolidation above this price could potentially transform the recent correction into a renewed rally within the upcoming week. 📈
However, Bitcoin is likely to experience sideways trading between $110,000 and $100,000 as it works to establish a new price floor. The recent low recorded around $101,500 on Friday may be retested before a more convincing range bottom solidifies above the $100,000 threshold. 📍
On longer time frames, crypto trader Merlijn observed that Bitcoin is currently retesting a multi-year uptrend line originating from 2022. Historically, this trendline has served as a critical support level, acting as a springboard for price recovery during previous cycle corrections. ⚡
If this trendline holds its support function once more, it would reinforce the notion that the broader bull market structure remains intact. Consequently, the recent price decline could be interpreted as a mid-cycle adjustment rather than the onset of a more significant downturn.
Disclaimer: This article does not constitute investment advice. All investment and trading activities carry inherent risks, and readers are encouraged to conduct their own thorough research before making any decisions.
Fundfa Insight
Current market data suggests Bitcoin is undergoing a stabilization phase after a leverage-driven correction, rather than a panic sell-off. Key levels to watch include support around $100,000-$105,000 and resistance at $117,500, with the long-term uptrend line providing significant potential support.