Bitcoin had been trading horizontally under $26,000 for most of last week. The same momentum carried over into the weekend as well. Owing to the lack of volatility, several started mocking the asset and pronouncing the market to be “dead.” However, that narrative has changed over the past 24-hours. For the first time in over three months, BTC dropped below $25,000 for a brief period. However, there was an immediate recovery. BTC’s latest price acceleration was a typical exhibit of a short squeeze.
Now, it is important to note that BTC’s price jump after briefly dropping under $25,000, is its strongest organic recovery since July 13. On Aug. 29, BTC did register a 6.11%, but it was on the back of Grayscales’ court victory. There was an immediate correction afterward. So the current spike is BTC’s strongest rally since the asset registered its yearly high in July.
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What’s next in store for BTC?
From a technical standpoint, if BTC loses $25,000, there isn’t much to hold it up. Material Indicators pointed out on X [formerly Twitter] that the bid liquidity in the order book was being removed. As a result, two major buy walls had been rugged, and a “support test” was inbound. Revealing the level to keenly watch out for, the Material Indicators noted,
“The short-term PA is pending a test of technical support at $24,750.”
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Is Everything Gloom and Doom for Bitcoin?
Well, likely not. The door to the other side also remains open. If bulls overcome the $26,000 resistance, then the tides could start reversing in Bitcoin’s favor. Prominent trader, Skew pointed out,
“Very clean perp CVD [Cumulative Volume Delta] divergence with sellers failing to break below $25K. So, key now is for bulls to reclaim $26K and break MS [Market Structure].”
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In fact, other traders are also optimistic. Credible Crypto, a.k.a. CrediBULL Crypto, pointed out that BTC’s dominance was on the verge of breaking above its local downtrend. He highlighted that the last Bitcoin rally was triggered by a similar breakout. The trader revealed that five days after BTC dominance broke its local downtrend, the price followed suit and ended up making a $7,000 move. With respect to what to expect going forward, he posted,
“With bullish market structure intact on BTC, 24.8k held, and BTC dominance breaking out, I think there is a decent argument to be made that our next impulse is just around the corner.“
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