Key takeaways:
- Bitcoin’s recovery could be curtailed by stubborn resistance from the $106,000-$108,000 supply zone.
- Persistent profit-taking could see BTC price drop toward the $100,000 level.
Bitcoin (BTC) price has rebounded by 3% to $106,000 from its weekend lows. However, its failure to decisively break above $106,000 has sparked concerns about whether BTC price could see a deeper correction over the next few days.
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*BTC/USD four-hour price chart. Source: Cointelegraph/*TradingView## Bitcoin could drop on waning buyer momentum
Bitcoin investor behavior data shows a drop in buying momentum, indicating a local top could be in, according to data from market intelligence firm Glassnode.
The chart below shows a drop in Momentum Buyers (investors who buy during uptrends), with the RSI dropping to 20. On the other hand, there is a sharp rise in Profit Takers (investors locking in gains) with the RSI rising to 77
Glassnode said:
“This trend often shows near local tops, as traders begin locking in gains instead of building exposure.”
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Bitcoin cumulative supply by cohort over time. Source: GlassnodeMeanwhile, Bitcoin’s supply in profit remains high at 96%, with the price around $105,000 on June 3.
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Bitcoin: Percentage of supply in profit/loss. Source: CryptoQuantA high number of holders in profit is often seen as a sign of an overheated market, which typically precedes or coincides with price corrections
As a result of these onchain signals, Bitcoin’s price may see pullbacks over the coming days as investors choose to book profits
Related: Bitcoin traders predict ‘larger correction’ as BTC price eyes sub-$100K liquidity
Bitcoin price faces stiff resistance on the upside
From a technical perspective, Bitcoin’s latest recovery was curtailed by a supply congestion zone between $106,000 and the previous $109,000 all-time high. When the price was rejected from this level on Jan. 31, BTC dropped 27% to $78,000, suggesting that the bears are aggressively defending this zone
Bitcoin bulls were required to produce a decisive daily candlestick close above this area to sustain the recovery.
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BTC/USD daily chart. Source: Cointelegraph/**TradingViewFailure to flip $106,000 into support could lead to a deeper correction in Bitcoin price, with the accompanying long position liquidations pulling the price toward the $100,000 psychological level
Data from CoinGlass showed a wall of ask orders building up above $106,000 in the 24-hour timeframe, reinforcing the importance of this resistance area.
![Bloomberg, Bitcoin Price, Bitcoin Analysis, Markets, BTC Markets]()
Bitcoin liquidation heatmap. Source: CoinGlassThis article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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- #Bloomberg
- #Bitcoin Price
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- #BTC Markets
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