Bitcoin Stays Bullish Despite Liquidations – Is $120,000 Within Reach?

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As a seasoned crypto investor with over a decade of experience in this volatile market, I’ve seen my fair share of rollercoaster rides. The past week was no exception, and the recent flash crash of Bitcoin was another reminder of why we always buckle up before jumping onto the crypto bandwagon.

For Bitcoin (BTC) investors, the previous week turned out to be quite exciting with a significant price jump exceeding $100,000 followed closely by a sudden drop of nearly 7%, causing the asset’s value to dip down to around $92,000 early on Friday.

Luckily, Bitcoin (BTC) seems to have regained some stability, moving back towards the $100,000 region. With the recent price increase, various market signals suggest a strong bullish trend for Bitcoin, giving investors confidence.

Bitcoin Liquidations No Bearing On Long-Term Price But Consolidation Nears

In a recent post on Quicktake, a user named Percival, who is an analyst, offered some predictions about Bitcoin’s potential direction after the latest market downturn, based on his analysis.

Percival states that several traders had predicted Bitcoin (BTC) might reach $100,000 as a significant milestone, even aiming for $200,000 afterward. However, the market around $100,000 was seen as “exceptionally volatile,” causing funding rates to spike temporarily at 70%, before eventually dropping down to 15%.

During the turmoil, long traders took on substantial trades opposing a robust resistance point at $100,000, supported by heavy sell-side liquidity. A sudden drop in Bitcoin’s price below $93,000 caused a massive forced selling of these long positions, leading to a whopping $277 million loss.

After this bearish occurrence, Percival observes that the Bitcoin market’s weekly power indicator stands at 28, suggesting a weak bullish energy and the need for price stabilization. Nevertheless, on a monthly scale, Bitcoin continues to hold a strong stance in upholding its bullish direction, but will also necessitate time for rejuvenation.

To support these forecasts, the analyst additionally cites the Choppiness Index (CI), a useful trading instrument for determining whether a market is experiencing trends or periods of consolidation. In the case of Bitcoin, a lower Choppiness Index indicates that the market is more likely to be in a consolidation phase.

As an analyst, I’ve found it intriguing that Percival suggests the 2020/2021 bull cycle underwent a roughly 20-day consolidation phase. Remarkably, all subsequent price consolidations since March 2024 have been of comparable duration. However, what catches my attention is the potential for this prolonged consolidation to lead to a significant upturn. In other words, the longer the consolidation, the more promising the potential rise.

Bitcoin STH Realized Price Shows $120,000 Target

Regarding projected Bitcoin prices post consolidation, Percival suggests that the current price level held by short-term investors (realized price) may serve as future significant resistance points. The first of these potential resistance zones is approximately $110,000, which lies about 1.5 standard deviations above the realized price and could attract a lot of traders to sell due to profit-taking opportunities.

If the positive momentum continues, Bitcoin might climb up to $120,000, a level that psychologically resists strong movement. Overcoming this resistance could necessitate additional analysis for a potential breakthrough.

Currently, as I’m typing this, Bitcoin is being traded at approximately $100,090, having experienced a rise of about 3.02% within the last 24 hours.

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2024-12-07 23:11