The past week has proven to be an eventful week for Bitcoin (BTC) holders following a historic price surge above $100,000, accompanied by a nearly 7% crash early Friday that saw the asset’s price plummet to $92,000.
Fortunately, BTC has found some stability, which has led to a gradual return to the $100,000 zone. Amid a price recovery, some market indicators are assuring investors of Bitcoin’s solid bullish structure.
Bitcoin liquidation has no impact on the long-term price, but consolidation is imminent
In Quick post on CryptoQuant, an analyst by the name of Percival shared some market insights on Bitcoin’s future move following the recent market loss.
According to Percival, many traders expected BTC to reach $100,000 as a key target, with further goals to reach $200,000. However, market volatility at $100,000 seemed “extremely hot,” with funding rates notably reaching a ephemeral peak of 70% before falling to 15%.
Amid this chaos, long traders opened significantly vast positions against a robust resistance level at $100,000, supported by high sell-side liquidity. Bitcoin’s sudden drop to below $93,000 triggered massive liquidation of these long positions, resulting in a loss of $277 million.
After this bearish event, Percival notes that the weekly BTC market strength index is 28, which signals tender growth dynamics and the need for price consolidation. However, on a monthly time horizon, BTC remains in a robust position to maintain its upward trend, but it will also require time to top up.
Based on these forecasts, the analyst also refers to the Choppiness Index (CI), a trading tool used to measure market trend or consolidation. The low CI seen in the Bitcoin market suggests consolidation.
Interestingly, Percival states that the 2020/2021 bull cycle has undergone a consolidation phase of approximately 20 days, and all price consolidations since March 2024 have also been of similar duration. However, the analyst emphasizes the positive side of potential consolidation, stating: “The greater the consolidation, the greater the growth.”
The realized Bitcoin STH price shows a target amount of $120,000
As for Bitcoin’s future price targets post-consolidation, Percival explains that the realized price of short-term holders is currently indicating future key resistance levels. The first of these levels is the $110,000 price area, which represents resistance near +1.5 standard deviations above the realized price, making it a zone where many traders can make a profit.
If upside pressure proves sufficient, BTC is expected to rise to $120,000, which is a psychologically stronger resistance level and may require further consideration in the event of a breakout.
At the time of writing, Bitcoin is still trading at $100,090, after rising 3.02% in the past day.
Featured image from CNN, chart from Tradingview
