Bitcoin is currently navigating a significant resistance area, raising questions among traders about whether it will achieve a breakout or experience a pullback. As the cryptocurrency inches higher, the supply of BTC on exchanges is diminishing, which typically creates a bullish environment. However, the price action suggests a potential for profit-taking in the near term.
According to recent analysis, Bitcoin has reached the $95,000 resistance band, coinciding with the 100-day moving average. This zone has historically been a point where BTC has faced rejection, indicating its role as a major supply area amidst an ongoing downtrend from previous highs. The daily Relative Strength Index (RSI) shows elevated momentum but is not at extreme levels, indicating that while there is short-term strength, it remains part of a larger corrective phase.
Traders should be cautious, as the current movement below the 100-day moving average suggests that the ongoing rally may merely be a counter-trend move rather than the start of a new bullish trend. If Bitcoin manages to break above this resistance, it could pave the way for a surge toward the $106,000 level, which aligns with the 200-day moving average and could signal the onset of a more sustained upward trend.
Analyzing the 4-hour chart reveals that BTC has broken out of an ascending pattern but is now consolidating at the top of this structure. Market momentum appears to be slowing, evidenced by smaller candlestick formations and a declining RSI after a bearish divergence, suggesting that local distribution may be occurring near these highs. Should buyers fail to maintain support around the $93,000 to $94,000 range, a retracement towards the lower trendline and the $90,000 region is likely.
Conversely, if Bitcoin can solidify support above the $93,000 to $94,000 area, another attempt to reach the psychologically significant $98,000 to $100,000 mark could become feasible. Immediate follow-through from buyers is crucial to avoid a possible false breakout scenario.
On-chain metrics indicate a continued decrease in exchange reserves, which typically suggests that Bitcoin is being moved into cold storage or held by long-term investors. This trend supports a positive supply environment, even though short-term corrections may occur as the price approaches notable technical resistance. A significant influx of BTC back to exchanges would be necessary to alter the current bullish outlook, but absent such a shift, the medium-term sentiment remains optimistic despite potential near-term volatility.
