Bitcoin Holds Steady at $106K Ahead of Potential Bull Run
After rallying above key resistance, Bitcoin (BTC) is carving out a “healthy pause” around the $106,000 mark. According to Derive founder Nick Forster, this consolidation phase will allow market participants to digest recent gains before a potential resumption of the uptrend.
Key Technical Indicators
Short-term momentum metrics suggest BTC is neither overbought nor oversold:
- Relative Strength Index (RSI): Sitting near 58 on the daily chart, signaling neutral momentum.
- 20- and 50-day Exponential Moving Averages (EMA): Converging at around $104K, providing dynamic support.
- On-Balance Volume (OBV): Trending slightly higher, indicating net accumulation by long-term holders.
On-Chain Fundamentals
Blockchain data metrics remain constructive:
- Hashrate & Difficulty: Bitcoin’s network hashrate recently hit all-time highs above 350 EH/s, while difficulty is set to adjust up by 3.5% in the next retarget. This underscores miner confidence and network security.
- Supply Shock: According to Glassnode, the supply held in illiquid wallets (long-term holders) has risen to ~60% of total circulating supply, reducing available selling pressure.
- Exchange Flows: Net BTC flows to exchanges have remained near zero over the past week, suggesting limited intent to sell.
Derivatives and Sentiment Analysis
Futures and options markets are indicating cautious optimism:
- Funding Rates: Funding rates on leading perpetual swaps have cooled to ~0.005% per 8h, down from peaks of 0.02%, reflecting reduced leverage.
- Open Interest: CME BTC futures OI stands at $2.5 billion, close to quarterly highs, showing sustained institutional engagement.
- Implied Volatility Skew: The 25% delta skew has flattened, indicating balanced demand for calls and puts around current spot levels.
Macro & Regulatory Context
Broader economic and policy factors are also at play:
- U.S. Federal Reserve: Investors are monitoring minutes from the Federal Open Market Committee’s latest meeting for clues on rate cuts, which could act as a tailwind for risk assets.
- Grayscale Bitcoin ETF: The ETF recently crossed $40 billion in AUM, highlighting institutional flows into compliant structures.
- Geopolitical Considerations: Stable regulatory developments in key jurisdictions such as the EU’s Markets in Crypto-Assets (MiCA) framework have removed uncertainty.
Additional Analysis
Liquidity Zones and Order Book Depth
On-chain order books reveal significant bids around $105,000–$106,500, creating a liquidity buffer. Higher asks are clustered near $110,000, which may act as a potential breakout trigger.
Miner Behavior
Data from CryptoQuant shows miner outflows have slowed, suggesting miners are comfortable holding at current levels rather than offloading into strength.
Expert Take
“This consolidation is textbook healthy behavior after a parabolic move,” says Nick Forster. “The market needs to build stronger foundations before attempting another leg up.”
Outlook and Strategy
Traders may consider the following approaches:
- Range Trades: Enter long positions near $105K with tight stops below $104K.
- Breakout Plays: Monitor volume and open interest spikes above $108K for momentum entries.
- Options Structures: Use call spreads to target $110K–$115K with defined risk.
Overall, the market’s current pause around $106,000 appears to be a healthy consolidation, providing a potential springboard for Bitcoin’s next upward move.