Bitcoin’s recent rally has demonstrated a remarkable bullish strength, breaking above the 100 and 200-day moving averages at the significant $90K mark. This is a clear indication of the dominance of buyers. However, as Bitcoin’s price inches towards the crucial $100K psychological threshold, market watchers anticipate a short phase of consolidation before any further breakout.
In the daily chart, Bitcoin’s strong bullish signal is a clear marker of a significant market shift propelled by considerable buying pressure. This surge has pushed the price beyond the critical resistance zone, thus reclaiming the previously mentioned moving averages. As Bitcoin approaches the $100K mark, it is likely to encounter significant supply, leading to a temporary pause or consolidation before any potential breakout. A decisive move above $100K could potentially clear the path towards retesting the all-time high (ATH).
On a lower timeframe, using the 4-hour chart, Bitcoin has affirmed its bullish momentum by breaking above the descending channel’s upper boundary at $84K. This move triggered a surge, pushing the price past the critical $90K resistance level, showcasing strong buyer commitment.
As the asset nears the critical $100K psychological resistance, which aligns with a significant previous swing high, market dynamics suggest that if buyers successfully breach this barrier, the path to Bitcoin’s ATH could reopen. However, failing to do so may result in a short-term consolidation below $100K before the asset makes its next significant move.
On-chain analysis shows that following the corrections and recoveries of Bitcoin in October 2023 and September 2024, Binance Futures funding rates turned notably negative during the early stages of each rally. This pattern underlines a persistent lack of investor confidence during sharp declines or extended consolidation periods.
In contrast, during strong Bitcoin rallies, funding rates have been observed to spike sharply as traders influenced by FOMO aggressively leverage to open long positions. This often signals overheated conditions and triggers subsequent corrective pullbacks.
Following Bitcoin’s recent rally, in which it has surged more than 28% off its recent low, the funding rates have seen a significant upward shift. This delayed reaction signals a renewed influx of leveraged long positioning.
Drawing from the historical behavior during the previous two major recoveries, current sentiment dynamics, and price structure, it strongly suggests that Bitcoin is well-positioned to break through its previous all-time highs in the near term. However, as with all things in the financial market, nothing is guaranteed, and investors are advised to conduct thorough research before making any investment decisions.
