Last week was an eventful one for Bitcoin (BTC) holders after a historic price gain above $100,000 was accompanied by a sudden drop of nearly 7% that pushed the asset’s price as high as $92,000. early on Friday.
Fortunately, BTC has found some stability, resulting in a gradual return to the $100,000 zone. Amid this price recovery, some market indicators assure investors of Bitcoin’s solid bullish structure.
Bitcoin Liquidations Have No Long-Term Price Impact, But Consolidation Is Coming
In a quick post on CryptoQuant, an analyst with the username Percival shared some market insights into Bitcoin’s future movement following the recent market loss.
According to Percival, many traders had anticipated BTC reaching $100,000 as a key target, with an eye toward $200,000. However, market volatility at $100,000 appeared “extremely high” and funding rates notably reached a temporary high of 70%, before falling to 15%.
Amid this chaos, long traders opened significantly large positions against a strong resistance level of $100,000 supported by high sell-side liquidity. Bitcoin’s sudden drop below $93,000 triggered a massive liquidation of these long positions, resulting in a loss of $277 million.
Following this bearish event, Percival notes that the BTC weekly market strength index is 28, indicating weak bullish momentum and the need for price consolidation. However, on the monthly timeframe, BTC remains in a strong position to maintain its uptrend but will also need time to recharge.
To support these projections, the analyst also refers to the Churn Index (CI), a trading tool to measure whether a market is trending or consolidating. A low CI like that seen in the Bitcoin market suggests consolidation.
Interestingly, Percival claims that the 2020/2021 bull cycle saw a consolidation phase of around 20 days and that all price consolidations since March 2024 have also been of a similar duration. However, the analyst highlights the positive of this potential consolidation stating that “the greater the consolidation, the greater the increase.”
Bitcoin STH Realized Price Shows $120,000 Target
In terms of future price objectives for Bitcoin after consolidation, Percival explains that short-term holders’ realized price currently indicates key future resistance levels. The first of these levels is the $110,000 price region, which represents resistance close to +1.5 standard deviation above realized price, making it an area where many traders could take profits.
If bullish pressure proves sufficient, BTC is expected to rise to $120,000, which presents a psychologically stronger resistance level and may require further consideration for a breakout.
At the time of writing, Bitcoin continues to trade at $100,090 following a 3.02% gain over the past day.
Featured image from CNN, chart from Tradingview
