What to Know:
- Bitcoin has rebounded from its recent correction, presenting a neutral-to-bullish setup.
- A critical battleground is forming at the $116K–$118K resistance band.
- Positive funding rates indicate a bullish market sentiment and potential for a breakout.
Bitcoin’s recent recovery from its downturn has been robust, demonstrating its resilience as it bounces back from the $107K demand zone. The crypto market is currently undergoing a crucial test, defined by the intersection of the 100-day MA and the $115K–$118K resistance band, which will likely set the direction for the next significant move.
On a daily timeframe, Bitcoin managed to regain its footing after reaching the $107K demand zone. It is now pushing against the descending trendline resistance and has regained control of the 100-day moving average, which it had momentarily lost. Meanwhile, the 200-day MA continues to provide more extensive structural support.
This situation presents a neutral-to-bullish setup. For the upward trend to continue, Bitcoin needs to cleanly break out from the descending channel boundary and the $118k supply zone. If it fails to surpass these resistances, it could reintroduce a downward volatility, putting Bitcoin at risk of falling back to the $107K and $100K demand blocks.
On a 4-hour timeframe, the rally that followed the order block has turned the short-term momentum in favor of the bulls. However, Bitcoin now faces a concentration of resistance at the descending trendline and the $116K–$118K supply zone.
This convergence makes the current level a vital battlefield. A rejection at this point could instigate a pullback towards the $110K order block. The reaction of buyers at this stage will be critical in maintaining momentum. Conversely, a breakout above both the descending resistance and supply zone could potentially propel Bitcoin towards the $124K all-time-high zone, a region with considerable liquidity.
Funding rates offer valuable insight into speculative sentiment. Historically, each shift into positive funding has been followed by price surges, as traders pay premiums to maintain long positions, signaling bullish conviction.
Currently, funding rates have turned decidedly positive following the latest price recovery. Unlike previous cycles, where funding flipped ahead of rallies, this time the rise is tracking price gains. This suggests speculative demand is aligning with the broader bullish trend.
If these heightened funding levels persist without overheating, the likelihood of a bullish breakout increases. Sustained positive funding typically reinforces confidence and attracts fresh inflows. However, overstretched leverage could pose a risk of short-term corrections.
In summary, the market is tilting bullish. If funding remains stable, Bitcoin is positioned to attempt a breakout towards new highs. This analysis underscores the dynamic nature of the Bitcoin market and the importance of monitoring key indicators and trends for informed trading and investment decisions.
