- Bitcoin was trading at around $96,000 at press time.
- Indicators strongly favor a rise to $100,000.
Bitcoin’s (BTC) recent price movement has attracted widespread interest as the cryptocurrency consolidates in a tight range below the $100,000 mark.
Analysts suggest that this period of range trading is a necessary break after a significant rally, allowing the market to stabilize before the next breakout.
Consolidation or preparation?
Bitcoin price action on the daily chart revealed a consolidation phase between $95,000 and $98,000, with reduced volatility signaling market indecision.
However, technical indicators reflect a generally bullish structure.
The moving averages remained firmly in a golden cross pattern, with the 50-day moving average holding above the 200-day moving average, highlighting the current bullish momentum.
Source: TradingView
Bollinger Bands have tightened, which usually precedes a sharp directional move.
Meanwhile, the Relative Strength Index (RSI) settled at 64.76, closing in on overbought territory but still leaving room for further upside.
The Parabolic SAR points, positioned below the candles, further strengthen the bullish momentum.
MVRV ratio and foreign exchange reserves
On-chain data has provided additional context to Bitcoin’s consolidation. The MVRV ratio, which measures market valuation relative to realized price, was close to 2.7 at press time.
While not at extreme highs, this level suggests that Bitcoin is approaching overvaluation, a potential warning for short-term investors. Historically, a ratio above three has often preceded periods of profit-taking and price corrections.
Foreign exchange reserves, according to data from CryptoQuant, continue to decline, a bullish indicator reflecting a decrease in selling pressure from holders.
The trend suggests that investors are choosing to keep their Bitcoin off exchanges, demonstrating their confidence in the asset’s long-term potential.
Source: CryptoQuant
Market Sentiment: Derivatives and Accumulation
Bitcoin funding rates on major exchanges have turned positive, reflecting the bullish sentiment in the derivatives market.
Traders appeared willing to pay a premium for long positions, reflecting their confidence in further price increases. This optimism is further supported by on-chain data showing a continued accumulation of whale addresses.
Large-scale investors have increased their holdings, reinforcing the narrative of long-term confidence in Bitcoin’s upward trajectory.
Source: CryptoQuant
Retail activity, on the other hand, declined, indicating that large investors are driving the current recovery. This divergence often adds stability to price action, as whale accumulation typically supports higher price levels.
Outlook: Bitcoin at $100,000
Bitcoin’s consolidation is a healthy phase of its market cycle, creating a basis for a possible breakout towards $100,000.
A move above $98,000, supported by an increase in trading volume, could confirm the resumption of the uptrend.
However, investors should remain cautious of any sudden rise in foreign exchange reserves or excessive expansion of the MVRV ratio, which could signal a reversal or correction.
Read Bitcoin (BTC) Price Prediction 2024-25
Despite these risks, the overall market structure remains favorable.
As Bitcoin digests recent gains, it appears well-positioned for another upward move, with strong technical and on-chain indicators supporting the case for a breakout.
