Bitcoin’s Bullish Retracement Towards $90K

Bitcoin’s bullish retracement continues as it approaches the critical $90K resistance level. However, low trading activity suggests a higher probability of rejection, leading to potential consolidation in the short term.

Technical Analysis

By Shayan

The Daily Chart

Bitcoin’s bullish retracement remains strong after finding support at the crucial $80K threshold. This has led to a steady climb toward the previous swing high. Recently, increased buying pressure around the 200-day moving average ($85K) has pushed Bitcoin toward the key $90K resistance zone, where significant supply may be present.

Despite this upward movement, a lack of strong bullish momentum and trading activity raises the likelihood of rejection at $90K, potentially resulting in further consolidation. If unexpected buying pressure materializes, a breakout above this level could instigate a liquidation cascade, driving Bitcoin to new highs.

The 4-Hour Chart

On shorter timeframes, BTC has been trading within a descending price channel, forming lower lows and lower highs, indicative of a bearish market structure with sellers in control. Recently, Bitcoin initiated a bullish retracement from the channel’s lower boundary and is currently testing the upper trendline at $88K.

If buyers can reclaim this critical boundary, a rally toward the $90K resistance is likely. Conversely, failure to break above could result in rejection and continued consolidation in the short term.

Sentiment Analysis

By Shayan

As Bitcoin adoption grows in the U.S., local investors significantly influence market trends. The Coinbase Premium Index is a pivotal indicator of their sentiment and trading behavior.

Recently, this metric has fluctuated near zero, reflecting uncertainty among U.S. traders. However, it appears to be turning positive, hinting at a potential resurgence of interest in BTC on the largest U.S.-based exchange.

Historically, a consistently positive Coinbase Premium has aligned with upward price momentum, as rising demand from U.S. investors bolsters market confidence. Although this may signal bullish sentiment, traders should exercise caution and consider other market factors that could swiftly affect sentiment.