Bitcoin has encountered a significant resistance level at $95,000, following a period of consolidation after a notable sell-off last November. The cryptocurrency is currently navigating a tightening price structure, indicating that traders should be vigilant regarding key support levels as demand from U.S. spot buyers appears to be waning.
On the daily chart, Bitcoin exhibits a rising wedge formation after struggling to maintain momentum just below the $95,000 resistance. This wedge pattern is tightening, suggesting that a breakout could occur soon. The 100-day and 200-day moving averages are positioned above the current price, acting as dynamic resistance at approximately $98,000 and $105,000, respectively.
The recent rejection at the $95,000 supply zone aligns with the upper boundary of the wedge, while the Relative Strength Index (RSI) has retreated from overbought levels, now hovering around 50. This indicates a lack of bullish momentum but leaves room for potential upward movement if buyers can regain strength.
Should the price break below the wedge, the next significant support level is around $80,000. Conversely, for a bullish breakout to be credible, Bitcoin would need to reclaim the $95,000 mark and surpass the aforementioned moving averages to signal the beginning of a new rally.
Examining the 4-hour chart reveals a clearer picture of the rising wedge. Although the price has respected the upward trendline from November”s lows, several attempts to breach the $95,000 mark have faltered. This choppy momentum on shorter timeframes raises concerns, as buyers have defended key levels but lack the strength to break through resistance.
A breakdown below the rising trendline near $88,000 could lead to a retest of the high-volume node around $86,000, potentially pushing Bitcoin towards the significant demand zone at $80,000. However, if buyers manage to reclaim the recent high at $92,000 and successfully breach the critical $95,000 resistance, a swift move towards $100,000 could follow.
In terms of market sentiment, the Coinbase Premium Index, which measures the price difference between Coinbase and other global exchanges, remains in negative territory. This negative premium suggests a decline in demand from U.S. institutional and retail investors, which could signal that the recent price bounce may lack sustainability. Historically, a shift back to positive premiums has preceded major uptrends, making the current situation a potential red flag for traders.
Until the Coinbase Premium Index shows positive readings again, any bullish outlook should be approached with caution. Traders are encouraged to monitor the evolving market dynamics closely as Bitcoin navigates this critical juncture.
