Bitcoin (BTC) has recently experienced a 28% rebound from a five-month low of $75,000, reached on April 9. However, the cryptocurrency’s struggle to decisively break above the $95,000 resistance level has raised concerns of a potential bull trap, compelling investors to analyze the underlying market trends.
Bitcoin ETF Flows: A More Solid Foundation
Thankfully, the prevailing momentum might avert another significant crash, bolstered by elevated spot Bitcoin ETF inflows observed in recent days. According to market intelligence firm Glassnode, this influx provides Bitcoin with a “more solid foundation” to advance toward higher price targets.
As Bitcoin edged above $95,000, the price momentum indicator surged from 58.7 to 82.1. Such a breakout is noteworthy as it has historically signaled robust bullish momentum, especially considering that similar occurrences preceded substantial price increases in the past.
However, Glassnode issues a cautionary note: periods of high momentum can lead to short-term cooling, necessitating sustained demand to keep the momentum in check. Currently, the spot Cumulative Volume Delta (CVD) metric suggests buy pressure remains strong, albeit slightly softening, indicating potential profit-taking as prices rise.
Additionally, bullish indicators are emerging as the hot supply begins to increase, alongside profitability metrics such as supply in profit expanding significantly. This shift in market sentiment indicates fewer chances for a dramatic downturn.
Technical Analysis: A Bull Flag Forming
On the technical front, Bitcoin is presently within a bull flag pattern, suggesting a possible breakout if Bitcoin can maintain key support levels. The flagpole pattern emerged as prices soared from $84,000 to a six-week high of $95,857 between March 3 and April 25.
A breakout above the $95,000 threshold could potentially escalate Bitcoin’s price to around $108,300, marking a significant 14% increase. Analysts suggest that Bitcoin is poised for a significant movement, with targets set for $100,000 and beyond.
Key Takeaways:
- Bitcoin’s resistance at $95,000 poses risks of a bull trap.
- Strong spot price momentum with substantial ETF inflows may push BTC towards $100,000.
- Forming bullish patterns hint at a target price of around $108,300 if resistance is overcome.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
