As the cryptocurrency market continues to tackle volatility, Bitcoin has shown resilience with a quick rebound from weekly lows. Amidst changing on-chain dynamics and changing emotions among large investors, traders are closely looking at key technical levels and volatility signals that could suggest an imminent move. This relatively mild period, combined with a significant supply adjustment between whale addresses, sets the stage for what could be a pivotal moment for Bitcoin and the wider crypto market.
- Bitcoin recovered sharply to $113,900, bounced off a low of under $111,000 during Asian trading sessions, supported by bullish divergence.
- The whale entity, which has more than 1,000 BTC, has offloaded around 147,000 BTC since August, indicating sustained supply pressure.
- Bitcoin’s implicit volatility has dropped to a multi-year low, suggesting a potential accumulation of momentum ahead of a major breakout.
Bitcoin (BTC) quickly returned to $113,900 on Wednesday after dropping its Monday low below $111,500 and briefly touching $111,000 on Binance during the Asian trading window. This recovery reflects early signs of mid-term market strength, backed by technical indicators pointing to a potential bullish revival.
One of the notable drivers behind the rapid bounce is the bullish divergence observed between the relative strength index (RSI) and the price of Bitcoin on the 1-hour and 4-hour charts. When RSI forms a lower price while RSI forms a higher low, it indicates the potential for a decline in bearish trend and momentum reversal.
The rebound coincides with Bitcoin retesting its important daily order block, establishing the technical foundation for further profits at $115,000. Traders see four-hour candles over $113,400 as a signal of a shift from bearish to bullish. Additionally, collecting the 200th Exponential Moving Average (EMA) on the 4-hour chart will strengthen the case to ensure that the upward momentum continues.
Market responses vary from trader to trader. MN Capital founder Michaël Vande Poppe commented on the strength of the rebound, saying, “Sweeping the low bitcoin and it follows. Breaking the 4H20EMA is best for upward momentum.” Conversely, Crypto Chase warned that Bitcoin needs to securely collect the $113,400-114,000 range. Otherwise you can see the price return to $107,000.
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Large Bitcoin Holders Reduce Stocks Amidst Low Volatility
Short-term price actions show signs of recovery, while broader on-chain data draws complex pictures. Cointelegraph previously reported that since Bitcoin exceeded $124,500 in August, a whale entity with more than 1,000 BTC sold about 147,000 BTC worth $16.5 billion. The magnitude of this distribution signals permanent supply-side pressure from the main holder.
Nevertheless, some market indicators suggest a more cautious, quiet environment than an overt bearish. XWIN Research data highlights the implicit volatility of Bitcoin has plummeted to its lowest level since October 2023. This “Calm Before the Storm” setup shows great moves potential once again brought back by volatility and trader positioning.
Supporting these findings, the encrypted data shows that Bitcoin exchange reserves remain at multi-year lows. This means there are fewer coins available for sale. The market value-to-realized value (MVRV) ratio indicates limited pressure to maintain a neutral stance and panic selling or positive profits.
Overall, the market appears to be stuck between whale-driven supply distribution and tightening of the supply background, setting the stage for an imminent volatility-driven breakout. The coming weeks could prove crucial for Bitcoin and the broader cryptocurrency ecosystem, as traders more clearly see the next trend.