Bitcoin (BTC) has reached a significant milestone after its recent rally past $106,000, leading market participants to speculate on its future trajectory. Will this digital asset gain further momentum to achieve new heights, or will it take a breather and retrace its steps?
Market expert Ali Martinez recently outlined in a tweet thread factors influencing Bitcoin’s potential surge or correction in the days ahead. While he remains optimistic that the cryptocurrency will ultimately reach an all-time high, the immediate outlook regarding whether a price correction will occur first is still uncertain.
Will BTC Surge or Retrace?
Martinez notes that Bitcoin has hit a critical resistance zone around $107,000 after experiencing a remarkable 42% increase over the past month. Historically, this area has served as a pivotal turning point during past rallies, notably in December and January. The analyst emphasizes that a daily close above $107,000 is essential for Bitcoin to gather the necessary momentum to achieve new highs. Until then, patience among market participants appears to be the order of the day.
As anticipation builds, the Bitcoin Relative Strength Index (RSI) indicates that momentum is stretched, having entered overbought territory since May 15. This scenario often precedes short-term corrections, suggesting that Bitcoin may be due for a brief retracement, particularly as the RSI indicates overbought conditions.
Additionally, BTC whales have begun realizing profits, marking a trend that is becoming increasingly evident. This cohort of market participants has sold more than 30,000 BTC since May 13, a level of profit-taking that typically heightens selling pressure and can lead to significant declines in the asset’s price.
Major Support And Resistance Zones
According to Martinez, if selling pressure intensifies, Bitcoin could potentially decline to the support zone between $95,850 and $98,730. Notably, over 1.19 million wallets have accumulated more than one million BTC at the $98,732 level, positioning it as a key demand zone. A further drop below this support region could trigger a more pronounced correction.
Conversely, should Bitcoin remain above this support range, the asset might consolidate and gather the necessary momentum for its next upward movement. In that scenario, $116,900 would emerge as the next major target. Consequently, Bitcoin’s pricing bands indicate $98,131 and $116,900 as critical support and resistance levels over the coming weeks.
As it stands, Bitcoin has been consolidating in recent days and was trading around $103,000 at the time of writing.
In conclusion, the cryptocurrency market finds itself at a crucial juncture. Whether Bitcoin surges to new heights or undergoes a correction will largely depend on external market forces and investor sentiment in the upcoming days.
