Bitcoin’s $105K rebound remains to be tested

Analysts at Matrixport noted that Bitcoin’s recent rally to $105,000 still needs to be tested, as indicators point to a possible pullback despite short-term catalysts.

In a recent post, the on-chain analytics platform warned traders to remain cautious as the BTC rebound may not be as high as expected. Analysts at Matrixport noted that the sustainability of the recent rally remains to be tested as outflows to Bitcoin ETFs increased from the previous week.

Some traders may argue that BTC’s down cycle has reached an “attractive” zone, with the RSI dropping to 35 and reaching deep into overbought territory. Matrixport also acknowledged that historical patterns indicate the region is known for seeing more activity from tactical buyers.

However, the platform believes that Bitcoin (BTC) may not be able to rise much higher considering that institutional investors are still very weak.

All 12 U.S. BTC spot ETFs saw a total outflow of $558.44 million as of last week’s market close, according to SoSoValue data. The November 7 outflow was the second-largest single-day outflow, taking into account recent trading sessions. When Bitcoin ETFs finally recorded modest inflows just the day before, traders were celebrating the end of a six-day streak of outflows.

Additionally, Matrixport highlights notable near-term catalysts that could trigger further upside. For one, the U.S. government shutdown, which has been going on for 40 days, is likely to be resolved.

The US Senate has given a bill to fund the government until January 30, Reuters reports. The bill also includes three annual spending bills. The bill still needs House approval and the president’s signature, but President Trump has expressed optimism that the bill could end the government shutdown.

“It looks like we’re getting pretty close to the end of the shutdown,” President Trump told reporters.

Another strong catalyst noted by Matrixport was Trump’s comments hinting at the possibility of a $2,000 stimulus-type payment mechanism for Americans. The concept is reminiscent of the 2020-2021 retail frenzy sparked by government-distributed checks.

Despite these strong catalysts, Matrixport cautions traders to remain cautious.

“Market capitalization recovery may be limited as ETF outflows over the past week signal a withdrawal of institutional capital, and these catalysts alone may not be enough to foster a sustained reversal,” Matrixport said in an analysis.

Bitcoin price analysis

At the time of writing, Bitcoin is currently trading at around $106,085, up 4.24% over the past day. However, the token has been mainly trending down, declining by 1.32% over the past seven days and only recently recovering the $100,000 level.

Similar to Matrixport’s forecast, Bitcoin’s near-term outlook remains cautiously bullish. However, the overbought RSI and proximity to key resistance levels seem to suggest that a short period of consolidation or pullback could occur before prices rise any further.

The token’s 30-day moving average is currently near $103,651 and is curving upward. This indicates that short-term sentiment is turning bullish after a period of consolidation and decline. This could mean that buyers are slowly regaining control after the price dipped below $100,000 and then managed to rebound above the MA.

Additionally, the relative strength index is 73.70, meaning Bitcoin has entered overbought territory. This suggests strong bullish momentum exists in the short term, but also the potential for a pullback or consolidation phase if buyers lose momentum.

At the moment, Bitcoin’s immediate resistance level is around $106,500 to $107,000, with a higher price action previously forming in early November. If BTC can break out of this range, it could open the door to the $110,000 to $112,000 range, where stronger selling pressure could emerge.

On the other hand, if Bitcoin loses its grip on the support level at $103,500, there could be a risk of further declines around $101,500.