Bitcoin has seen a 4% pullback since last Friday, following a sturdy 15% rally from local lows. Despite this recent momentum, the market faces uncertainty and volatility as BTC trades below the key $60,000 level — a psychological sign that signals direction.

Investors are closely watching to see if Bitcoin can regain strength and break through this key resistance or if it will continue to struggle in the compact term.

There are signs of recovery, however, as Coinbase data shows BTC is once again trading at a price premium, indicating sturdy demand. Additionally, key data from Coinglass highlights the critical liquidity levels that BTC could reach in the coming weeks.

These factors suggest that BTC is at a pivotal moment now, and its price action over the next few days will likely determine the market’s direction in the coming months. Traders and investors are bracing for Bitcoin’s next gigantic move.

Bitcoin Consolidation May Be Ending: What’s Next? $70,000?

The last few weeks have encouraged Bitcoin, raising hope and optimism among investors bracing for a deeper correction. Recent data points to a positive change in market sentiment.

Analyst Daan highlighted with X that BTC is trading at a premium on Coinbase, a sign of renewed spot demand from US investors and potential interest from ETFs. This premium is generally bullish, reflecting increased buying activity and confidence in BTC’s future.

However, significant price declines on stock exchanges, often seen when markets are at their lowest levels, can be a signal of bearish sentiment, although they also represent potential entry points for experienced investors.

Complementing this, Coinglass provided key metrics regarding Bitcoin’s liquidity levels. The Binance BTC/USDT Liquidation Heatmap shows that BTC recently absorbed a huge liquidity cluster below $50,000 during the August 5 sell-off. This move broke through significant support levels, leaving less significant clusters nearby.

Currently, the strongest liquidity levels remain at USD 47,000 and below, with significant interest rising above USD 70,000.

These observations indicate that while Bitcoin faces potential challenges at support and resistance levels, current market dynamics point to a more bullish outlook.

The lack of significant pockets of liquidity around the current price and the premium observed on Coinbase could indicate a continuation of the upward trajectory, provided BTC maintains its recent gains and gains momentum.

BTC Technical Analysis: Key Levels to Watch

Bitcoin is trading at $58,593, reflecting a 4% decline from last week’s peak of $60,670. The cryptocurrency faces challenges in maintaining its position above the 4-hour 200-hour exponential moving average (EMA) at $58,883, a key level it reclaimed last Friday, signaling near-term strength.

This EMA has been a significant resistance since early August and could become a modern support if BTC manages to break above it.

To strengthen the bullish outlook, Bitcoin needs to reclaim and sustain above the 4H 200 EMA and the $60,000 level as these levels are key in shaping the overall market sentiment. Failure to close above the 4H 200 EMA could lead to a test of the next demand level near $57,500, which is a healthier support zone.

If the correction continues, BTC faces potential downside risks toward $55,500. This deeper correction would test lower support levels and could signal more challenging market conditions ahead. Maintaining above these key levels will be crucial to determining Bitcoin’s short-term direction and overall market stability.

Featured image is from Dall-E, chart is from TradingView