Bitcoin (BTC) has arrived at a crossroads after its recent rally past $106,000. Market participants are speculating whether the digital asset will see more momentum to register new highs or retrace a bit to cool off.
A tweet thread by market expert Ali Martinez has outlined factors that could contribute to bitcoin’s surge or correction in the coming days. He believes the cryptocurrency will eventually hit an all-time high, but it remains unclear if the asset will experience a correction first.
Will BTC Surge or Retrace?
According to Martinez, BTC has hit a critical resistance zone around $107,000 after rallying at least 42% in the past month. This region has historically been a turning point for past rallies, as seen in December and January. The analyst insists a daily close above $107,000 will provide the push BTC needs to reach new highs, but until that happens, market participants remain patient.
While the wait continues, the Bitcoin Relative Strength Index (RSI) shows that momentum is stretched, and the asset has climbed into overbought territory since May 15. A surge into this zone has always preceded short-term corrections. This means BTC may be due for a brief retrace, especially with the RSI signalling overbought conditions.
Additionally, BTC whales have been realizing profits. This significant profit taking is evident in this cohort of market participants selling more than 30,000 BTC since May 13. Such levels of profit taking usually increase selling pressure and trigger notable declines in the price of an asset.
Major Support And Resistance Zones
Martinez said BTC could fall to the support zone between $95,850 and $98,730 if selling pressure from investors increases. At least 1.19 million wallets have accumulated more than one million BTC at $98,732, making that level a major demand zone. The asset could see an even deeper correction if BTC falls below this support region.
However, if BTC holds above the support range, the asset could consolidate and amass momentum for its next leg up. From there, $116,900 is the next major target. So, Bitcoin pricing bands show $98,131 and $116,900 as key support and resistance levels for BTC over the following weeks.
Meanwhile, the leading cryptocurrency has been consolidating over the last few days, and was changing hands around $103,000 at the time of writing.
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