Bitcoin Consolidates Below $105,000, Analysts Eye Support Test

Bitcoin (BTC) has been trading below the $104,000 to $105,000 range for most of the week, a zone that many analysts consider a resistance area. However, an alternative perspective suggests that BTC is merely consolidating within a bull flag pattern. A bull flag is a continuation pattern characterized by a period of sideways price action following a sharp uptrend. When the structure confirms or breaks from the trendline resistance, the uptrend is expected to continue.

During this consolidation phase, the absence of buy volume is the primary factor, rather than indecision from buyers and sellers. Bitcoin's rapid ascent from $74,400 to $105,900 was marked by significant liquidations in the margin markets and robust spot volumes, aligning with several days of substantial spot BTC ETF inflows. Several companies also announced plans to purchase Bitcoin and establish BTC treasuries during this period.

The spot and futures cumulative volume delta, along with the open interest metric, indicate that traders are selling near the range highs. There is a lack of new long leverage and significantly sized spot positions being opened in this area. Conversely, drops to the range low (bull flag support) see bids filled on the spot side, but there is still limited use of margin for fresh longs.

Bitcoin's recent cool-down phase is a normal outcome after the near 40% recovery that started on April 8. The loss of upward momentum resulting from profit-taking in futures markets near the current range high is also expected. According to Glassnode, the on-chain data company, the recent profit-taking for short-term traders does not exceed the statistical norm, leaving room for further price upside.

Some analysts warn that a brief flush down to test $100,000 to $90,000 as support could be the next move for BTC price. Material Indicators, a Bitcoin market liquidity resource, stated that barring a serious catalyst, BTC has a legitimate support test at $100,000, with the order book priming for that move.

Analyst Daan Crypto Trades shared his view, noting that the bulk of bullish and bearish narratives with the potential to impact Bitcoin’s price action have cleared up. He observed that BTC price has stalled near its all-time high while stocks have continued to rally. The analyst remains cautiously bullish with price above $90,000, but this is dependent upon how US equity markets perform in the short term.