The past week proved eventful for Bitcoin (BTC) holders after a historic price gain of more than $100,000 accompanied by a nearly 7% crash pushing the asset’s price as low as $92,000 early Friday.
Fortunately, BTC found some stability leading to a gradual return to the $100,000 area. During this price recovery, some market indicators are reassuring investors about the strong structure of Bitcoin.
Bitcoin Liquidations Have No Long-Term Price Impact But Consolidation Is Near
In a Quicktake post on CryptoQuant, an analyst with the username Percival shared some market insights on the future of Bitcoin following recent market losses.
According to Percival, many traders were expecting BTC to reach $100,000 as the main target, with another eye on $200,000. However, market volatility at $100,000 proved “too hot” with funding levels reaching a temporary high of 70%, before falling to 15%.
During this chaos, long traders opened very large positions against the strong resistance level of $100,000 based on high liquidity sales. Bitcoin’s sudden crash to below $93,000 caused a massive liquidation of these long positions resulting in a loss of $277 million.
Following this bearish event, Percival notes that the weekly BTC market strength indicator is 28, indicating weak bullish momentum and the need for price consolidation. However, on a monthly basis, BTC remains in a strong position to maintain its bullish trend but will also need time to recharge.
In support of these predictions, the analyst also refers to the Choppiness Index (CI), a trading tool to measure whether the market is trending or converging. A low CI as seen in the Bitcoin market suggests consolidation.
Interestingly, Percival says the 2020/2021 bull cycle experienced a consolidation phase of about 20 days and all price consolidation since March 2024 has also been within the same period. However, the analyst emphasizes the beauty of this potential merger saying “The bigger the merger, the bigger the upside”.
Bitcoin STH Price Made Shows $120,000 Target
Regarding the future price targets of Bitcoin following the consolidation, Percival explains that the received price of the short-term holders is currently showing the upcoming key resistance levels. The first of these levels is the $110,000 price area which represents resistance around +1.5 standard deviations above the gain, making it an area where many traders are likely to make a profit.
If the bullish pressure proves to be enough, BTC is expected to rise to $120,000 which presents a strong psychological resistance level and may require further consideration to emerge.
At the time of writing, Bitcoin continues to trade at $100,090 following a 3.02 % gain over the previous day.
Featured image from CNN, chart from Tradingview
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