KeyTakeaways:
Bitcoin tests $96,000 support; a break could lead to further downside toward $94,400.Increased network activity signals potential bullish momentum, but market sentiment is cautious.MACD and Bollinger Bands show bearish signs; price reversal possible above $102,000.
Bitcoin’s price is currently in a volatile phase, fluctuating between $90,000 and $108,000, with traders on edge awaiting signs of a decisive move. Recent price action points to a consolidation phase, after an earlier surge, with a test of support levels expected in the coming days. The $96,000 zone, has emerged as an area of confluence, offering a potential turning point for Bitcoin’s market direction.
Bitcoin is presently facing price resistance as it hovers above $97,000. The current price is within a tight range, where the $96,964.7 level, located around the 0.618 Fibonacci retracement, plays a pivotal role.
If Bitcoin fails to maintain its position above this support, the next target could be the 0.65 retracement zone near $94,400. However, the 0.786 Fibonacci retracement level, near $88,942, is viewed as the next major support zone, which traders will closely monitor.
This period of range-bound price action, often referred to as “chop,” suggests mixed market sentiment. Investors remain cautious as the price continues to bounce within these boundaries, and a breakout, whether upward or downward, is yet to materialize.
Network Activity Correlates with Price Trends
A closer look at Bitcoin’s network activity reveals that the current market surge may be supported by increased user engagement. Active addresses have surged alongside Bitcoin’s recent climb, suggesting that higher participation is driving the price action. This correlation shows how network activity can often precede major price shifts. Historically, such spikes in address activity have been associated with bullish movements, as seen during the late 2024 price surge.
However, as the price stabilizes near $97,000, the market’s overall engagement appears to be cooling slightly, mirroring the price’s current dip. The ongoing changes in trading volume reflect this uncertainty, with Bitcoin’s daily trading volume surging to $56.85 billion, marking a 102.95% increase in activity, signaling that market participants are closely monitoring price action for any signs of a trend reversal.
Technical Indicators: A Mixed Outlook
Bitcoin’s technical indicators paint a picture of bearish momentum. The MACD indicator suggests downward pressure, with the MACD line below the signal line, highlighting the prevailing negative trend. The widening histogram further confirms the growing selling pressure, adding to the case for potential further downside.
At the same time, Bitcoin is testing the lower Bollinger Band at $97,917. Historically, when Bitcoin reaches the lower band, it has often seen a rebound, although a failure to hold above this point could signal deeper corrections. A potential price reversal may occur if Bitcoin can regain its position above $102,000, which could reignite bullish momentum.
