Bitcoin Rebounds to $88K: On-Chain Data and Technical Patterns Signal Rally to $118,000
Bitcoin is currently trading near $88,000, which is a 1.7% increase over the last 24 hours and a big rebound from its previous drop to $80K
Quick overview
- Bitcoin is currently trading around $88,000, marking a 1.7% increase in the last 24 hours after a significant drop below $80,500.
- Analyst Astronomer suggests that the $80,000 level is likely the bottom, with a 91% chance of Bitcoin reaching $118,000 soon.
- On-chain data indicates a major supply rotation from long-term to short-term holders, which typically occurs in the final stages of a bull market.
- If Bitcoin maintains weekly closes above $83,000, it could advance towards $112,000-$118,000 in the coming months.
Bitcoin BTC/USD is currently trading around $88,000, which is a 1.7% increase over the last 24 hours and a big rebound from its previous drop below $80,500. The cryptocurrency market just had one of its fastest capitulation episodes since late 2022. However, on-chain data and historical pattern analysis suggest that the worst may be over for BTC bulls.
Bitcoin Sees Rapid Recovery Following Historic Capitulation Event
Astronomer, a well-known Bitcoin analyst, says that a specialized capitulation-volume model has found the $80,000 level to be a very likely bottom. The model has correctly identified market turning points in 11 previous cases by following three successive high-volume red weekly candles before large reversals. It’s interesting that in eight of those eleven occurrences, the pattern came before new legs up that eventually led to new all-time highs. There was only one case where the disadvantage lasted.
Astronomer says that Bitcoin has a 91% chance of going from its current level to $118,000 and a 99% chance of going from its present level to $112,000. The expert stressed that the current bearish mood is “the real trap,” and they warned that waiting for trend confirmation can lead to missing the bottom and having to chase higher prices later.
BTC/USD Technical Indicators Flash Undervaluation Signals
The Bitcoin Network Value to Transactions (NVT) Golden Cross has fallen to -1.6, which usually means that the market is undervaluing something and gives short-term mean-reversion chances. This indicator compares the value of Bitcoin’s market capitalization to the value traveling across its network. It helps find times when the price has been separated from the network’s core activity.
Bitcoin has successfully challenged the 100-week moving average near $86,000 on the weekly chart. This is a historically important support level that has acted as a springboard during prior bull-market pullbacks. Even while momentum indicators imply that the trend strength has diminished after the breakdown from the $110,000-$100,000 consolidation zone, the defense of this important technical level retains the long-term bullish structure in place.
Even though the NVT readings were positive, crypto trader Darkfost warned against employing leverage in the current unstable market. If the weekly finish is below the $83,000-$86,000 level, it might lead to bigger corrections toward the $56,000-$60,000 region where the 200-week moving average is.
BTC Long-Term Holders Distribute as Short-Term Buyers Absorb Supply
There has been a big change in on-chain data: almost 63,000 BTC has moved from long-term holders to short-term holders. CryptoOnchain calls this one of the most important supply rotations of this cycle. This pattern usually happens in the last stages of a bull market, when early investors make money and new investors buy in at higher prices.
CryptoQuant data shows that Bitcoin just had its biggest net realized loss since the FTX meltdown. However, the market quickly absorbed this selling pressure and turned positive again. This quick recovery could mean that weak hands have been shaken out, which could set up a strong base in the $80,000 to $85,000 level.
Macro Liquidity Factors Support Recovery Thesis
Arthur Hayes, one of the founders of BitMEX, said that Bitcoin’s 35% drop is the bottom of the cycle since the Federal Reserve’s quantitative tightening program is about to expire and banks are lending more money. Hayes thinks that when liquidity improves, cryptocurrencies will have a “rising-tide effect.” He said, “We chop below $90K, maybe a stab into the low $80Ks, but $80K holds.”
The combination of technical pattern recognition, on-chain capitulation signs, undervaluation metrics, and better macro liquidity conditions makes a strong argument for Bitcoin bulls. There is still a good chance of short-term volatility, with possible retests of the $80,000-$85,000 support zone. However, the statistical evidence and historical precedent show that the odds favor a large increase from current levels.
Bitcoin Price Prediction: $118,000 Next Target?
If the $83,000 barrier holds on weekly closes, Bitcoin looks like it will advance toward $112,000-$118,000 in the next few months, based on a weighted examination of capitulation patterns, NVT signals, and macro considerations. The first level of resistance is at $90,000, and the second level is at $100,000. After that, the price should go up to new highs.
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