Important takeaways:
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Bitcoin fell to $122,500 on Tuesday, but Onchain data shows no signs of an overheated market.
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Resistance at $135,000 is the major BTC price barrier for now, with major support around $120,000.
Market analysts said Bitcoin’s advantages remain intact despite a 1.7% correction from the all-time high of $126,200 reached on Monday.
Bitcoin to see ‘minor pullback’ before continuing higher
“BTC is in up-only mode, with price printing printing one red candle in the past 11 days,” said analyst Mags in an X-Post on Tuesday.
The BTC/USD pair is getting a slight pullback towards the key support level at $123,300 on the lower timeframe.
The analyst said that a daily candlestick above this level could allow Bitcoin to “continue higher,” adding that failure to hold this support could result in a retest of the $120,000 zone.
“Overall, DIPS is a buy, with next resistance near $135,000.”
MN Capital founder Michael van de Poppe said Bitcoin is consolidating an all-time high, adding:
“It’s building stamina for the next big breakout towards $150,000.”
The accompanying chart showed that the $118,500 to $120,500 zone would be the “optimal entry point” if a correction were to occur.
As reported by Cointelegraph, Bitcoin was able to consolidate within a narrow range of $122,000 to $124,000 in the coming days as it builds momentum to move higher on price discovery.
Bitcoin price momentum is accelerating
Private wealth manager SwissBlock said Bitcoin’s upward momentum remains strong despite a slight correction from record highs.
SwissBlock shared a chart revealing an “unusual” setup where Bitcoin price momentum broke resistance and was destroyed without a major correction in the latest rally.
“Momentum is ignited by resistance, not then faded.”
“Nevertheless, a bit of short-term friction is needed to build deeper acceleration,” added SwissBlock.
Reflecting this observation, Onchain data provider GlassNode noted that Bitcoin’s relative strength index (RSI) has increased from 44 to 66 over the past seven days, indicating a 50% increase in upward momentum.
This reflects “stronger buying momentum and growing market confidence,” Glassnode writes.
Related: Gold rally means $644k per Bitcoin in ‘equivalent value’ – vaneck
Meanwhile, spot demand accelerated with spot cumulative volume delta (CVD) turning positive, increasing to $68.7 million from $73.6 million last week.
Additionally, trading volume on centralized exchanges increased by 32% to $9.27 billion from $6.99 billion during the same period.
GlassNode added:
“The rally supports recent price momentum and suggests investor engagement and increased confidence. However, sustaining this elevated activity is key to sustaining the uptrend.”
ONCHAIN data reveals important Bitcoin price levels to watch
A look at Bitcoin’s short-term holder (STH) cost base reveals that STH is still active and not tired.
STH cost basis refers to the average purchase price of investors who have held Bitcoin for less than 155 days.
Price touched this metric’s “heated” band on July 14th. This reached a previous all-time high of $123,200, but did not enter the overheating zone.
If it moves up to retest the upper band – matching one standard deviation above STH’s realized price could reach an all-time high at $133,460.
Above that, the next resistance is the $150,000 “overheat” band. Matches two standard deviations above the realized price of STH.
This suggests there is still room for expansion before we see panic selling or euphoria.
On the downside, the first major support is at $113,300, representing the realized price of Bitcoin’s STH.
This price range has historically served as an important support level, as seen from April 6th to September 25th, and during the October 2024 to January 2025 rallies.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making decisions.