Bitcoin is at a critical juncture after pulling back from its all-time high (ATH) on Monday to test key demand levels. The cryptocurrency’s ability to hold these levels will determine whether it confirms the breakout and resumes its upward momentum or enters a correction phase that could push it below the psychological level of $100,000. As the market watches closely, Bitcoin faces a critical test that could shape its course in the coming weeks.
Key metrics from CryptoQuant provide insights into current market dynamics, revealing a notable decline in selling activity over recent weeks. This trend has led to a sharp decline in the sell-side risk ratio, a metric used to measure pressure from sellers compared to buyers. A lower sell-side risk ratio indicates that selling pressure has eased significantly, creating a more favorable environment for continued upside potential.
While sentiment remains cautiously optimistic, Bitcoin’s ability to maintain these critical demand levels will be the deciding factor in the short term. A successful defense could lead to renewed buying interest and set the stage for another push into uncharted territory. Conversely, missing these levels may lead to a long-term consolidation or correction phase, testing investor confidence.
Bitcoin activity indicates a strong move forward
Bitcoin is currently going through a period of extreme volatility, with market sentiment fluctuating amid widespread uncertainty. While the price remains above critical levels, analysts expect a consolidation phase – a common precursor to significant market movements. This period of stability could help Bitcoin build a stronger foundation for its next potential rally, or conversely, signal a deeper correction.
Chief Analyst Axel Adler provided valuable insights into current market dynamics, Share data from CryptoQuant on X. According to Adler, there has been a noticeable decline in sell-side activity in recent weeks, which has led to a sharp decline in the sell-side risk ratio. This metric measures the pressure exerted by investors who are selling their holdings compared to those who are buying, and a decrease in it indicates that much of the gains and losses planned by market participants have already occurred.
Although the current sell-side risk ratio is still slightly above its long-term averages, its downward trend indicates lower market activity and a potential build-up to the next phase of volatility. In essence, the market appears to be in a state of transition, waiting for new catalysts to drive a decisive move.
As Bitcoin remains above key support levels, its ability to consolidate and stabilize will be crucial in determining the trend for the coming weeks. Whether the next move is up or down, the decline in selling pressure and overall market dynamics point to a major shift ahead. Investors are closely watching signs of renewed momentum as Bitcoin prepares for what could be another defining phase in its cycle.
BTC tests liquidity below ATH
Bitcoin (BTC) is trading at $101,800 after the weekend and the start of a week marked by extreme volatility. While BTC has managed to stay above the critical level of $100,000, this level remains a key line of defense for bulls aiming to maintain bullish momentum. To consolidate the bullish structure, Bitcoin must sustain above $100,000 and push through the major resistance levels that are currently defining its price.
The first target for an upside breakout is $103,600, a level that has served as a major barrier in recent trading sessions. Clearing this resistance could pave the way for BTC to challenge its all-time high (ATH) at $109,900. Achieving this will likely attract new buying interest, increasing upward momentum and potentially pushing BTC into a new phase of price discovery.
However, the risk of a deeper correction looms if Bitcoin fails to regain these levels in the coming days. Missing the $100,000 mark could increase selling pressure, triggering a drop to lower support areas and prolonging the consolidation phase.
The next few days will be crucial for Bitcoin as it tries to regain its strength and maintain its position above $100,000. Investors are watching these levels closely, waiting for Bitcoin’s next major move.
Featured image by Dall-E, chart from TradingView