Bitcoin's Corrective Phase Looms, But Bounce-Back Potential Awaits

Bitcoin's recent performance has seen a slight dip of 1.08% in the past 24 hours, but it remains above the $100,000 region. Despite the bullish market sentiment, corrective phases are an inevitable part of the broader market cycle. AMBCrypto's analysis suggests that a corrective phase could be approaching, with key regions identified to support a bounce-back in price.

The Index of Bitcoin Cycle Indicators (IBCI) on CryptoQuant indicates that Bitcoin has entered a distribution zone, a level last reached eight months ago. IBCI is a combination of seven market indicators, including Puell Multiple, MVRV, NUPL, and SOPR. A distribution is indicated when the IBCI crosses into the red region on the chart, starting at 75%, suggesting there's still growth potential for BTC, but selling activities have begun. Once IBCI hits the 100% zone, BTC would reach a market top, with its price forming lower highs and lows. Currently, IBCI is above 50%, suggesting a corrective phase is expected before BTC resumes its upward trajectory.

Further analysis from AMBCrypto identified a potential bounce-back level should a correction occur before the market top is reached. Using the In/Out of Money Around Price, an on-chain metric, a potential BTC pullback would be met by demand for a continued move upward in the range of $94,800 to $97,000, with a mid-range of $96,500. Approximately 1.36 million BTC buy orders from 1.4 million addresses support this range. A corrective phase into this region would be followed by a price surge back into the $100,000 region, with the possibility of BTC setting a new high from there.

Other market activities could also play in BTC's favor for a move up. The creation of a U.S. digital assets stockpile, as announced in the recent executive order, could favor BTC. If the U.S. government increases its holdings of BTC, it could drive demand and positively influence BTC's price trajectory. According to Arkham, the U.S. government already holds approximately 198,000 BTC, valued at $20.71 billion.