Bitcoin’s price has been consolidating around the $100K mark despite a brief dip below it on January 29.
The market seems to be at a turning point, with technical and on-chain analysis suggesting that a breakout could be on the horizon.
Technical Analysis: Bullish Momentum Building
Daily Chart: Bitcoin is currently trapped in a range between the $108K resistance and $100K support levels. After bouncing off the $100K support, a move toward the $108K zone is expected.
Relative Strength Index (RSI): The RSI remains above 50%, signaling that the market sentiment is still bullish, supporting a potential upward rally.
4-Hour Chart: Potential Bullish Flag Breakout
The 4-hour chart shows Bitcoin consolidating within a bullish flag pattern over the past week.
A breakout above the upper boundary of this pattern could lead to a rally toward $108K, with the potential to test the $115K mark.
Given the recent rebound off the lower boundary and support at $100K, a bullish continuation seems likely.
On-Chain Analysis: Shrinking Supply Supports Price Increase
One factor contributing to Bitcoin’s bullish price action is the decreasing supply on exchanges.
Since early 2024, the Bitcoin exchange reserve has been declining, as investors move BTC off exchanges into personal custody.
This reduced supply has helped fuel the current bull run and could continue to push prices higher in the coming months.
Bitcoin’s next move appears to be crucial as it remains in a consolidation phase. If the current momentum holds, we might see a breakout to the upside soon.
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