Bitcoin has successfully marked a V-shaped reversal, surging to the $103,000 range, reigniting speculation on whether this rally will continue and potentially reach $107,000.
As market concerns regarding DeepSeek AI fade, the crypto market has experienced a bullish surge. Bitcoin’s recovery has helped push the overall market capitalization back above $3.5 trillion, with BTC leading the charge by reclaiming the $103K mark.
Now that Bitcoin has reclaimed a significant portion of the market value, the burning question is whether the cryptocurrency can extend this rally and reach the $107,000 level. Let’s dive deeper into Bitcoin’s price analysis to assess the situation.
Looking at the 4-hour chart, Bitcoin is exhibiting a rapid V-shaped recovery after breaching the 200 EMA line. A key support level has been found at the 50% Fibonacci retracement mark, which lies at $98,611. This level has played a crucial role in supporting Bitcoin’s upward momentum, as it coincides with the formation of a morning star candlestick pattern.
Bitcoin was briefly rejected at a low of $97,750 but quickly rebounded. The cryptocurrency is now trading at $103,227, having successfully broken through the 200, 100, 50, and 20 EMA lines. The next immediate target for Bitcoin is the 78.6% Fibonacci retracement level at $103,393.
However, a higher price rejection points to continued resistance at these levels. The bullish reversal has also resulted in the 4-hour RSI returning to the midpoint, signaling a potential increase in buying pressure. If this momentum continues, Bitcoin could be on track to test the $107,000 price point in the near future.
Despite the recent surge in Bitcoin’s price, institutional support has shown signs of weakening. This is particularly evident in the U.S. spot Bitcoin ETFs, which recorded an outflow of $457.48 million on January 27. While BlackRock remains a sole buyer with an inflow of $63.94 million, other institutions like Fidelity and Grayscale have led the selling spree. Fidelity alone recorded an outflow of $268.59 million, while Grayscale saw $108.47 million exit.
In addition, Bitwise, ARK, and 21Shares sold off Bitcoin, contributing to the downward trend in institutional participation. VanEck had a smaller outflow of $5.68 million, but other Bitcoin ETFs saw no significant changes. This institutional exodus could pose a challenge for Bitcoin’s long-term price sustainability, although its recent recovery has still been strong.
Despite the outflows, bullish sentiment is rising within the Bitcoin derivatives market. Over the past 24 hours, the total liquidations across the crypto market reached $588.66 million, indicating strong volatility. Nonetheless, optimism is evident in Bitcoin’s derivatives, as open interest has climbed back to a $66 billion valuation, while the long-to-short ratio has surged to 0.9681. Additionally, funding rates have also seen a sharp recovery, now standing at 0.0085%.
These developments highlight strong bullish momentum in the market, with traders positioning for an extended upward trend.
Bitcoin’s recent bullish rally could see it surpass the 78.6% Fibonacci level at $103,393, potentially triggering a buying opportunity. The next key target, according to Fibonacci levels, is $107,123.
On the downside, crucial support levels include the $100,000 mark and the 50% Fibonacci retracement level at $98,611. These levels will likely act as important zones for price stability in case of a pullback.
Bitcoin has bounced back in impressive fashion, with a potential target of $107,000 in sight. Despite some institutional outflows, the bullish momentum from Bitcoin derivatives suggests that this rally could have legs. However, traders should keep an eye on resistance and support levels, as any rejection at higher price levels could lead to a price correction. As the market continues to evolve, Bitcoin’s trajectory remains one to watch closely in the coming weeks.
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