Bitcoin Faces Crucial Test at $104,500 Demand Zone

Bitcoin is currently at a critical juncture on its 4-hour chart, with price action tightening within a narrowing range. This area is pivotal as it could determine the next significant move for BTC. As momentum wanes and volatility compresses, the market is poised for a decisive breakout or breakdown.

According to a post by ATOM B, Bitcoin has broken above a downward trendline, a move validated by two confirmed retests. This technical shift suggests a potential structural change. However, BTC faced strong resistance around the $108,500 and $112,500 zones, leading to a notable rejection. Consequently, the price has pulled back and is retesting the $104,500 demand zone, a level crucial for potential bullish continuation. This zone has historically acted as a base for upward momentum, and BTC's behavior here could dictate the next directional bias.

If bulls successfully defend the $104,500 area and print a higher low with strong volume, it could reignite upward momentum, pushing BTC back toward the $108,000 and $112,000 resistance regions. Conversely, if $104,500 fails to hold, the next support lies near $100,000, which could invite increased bearish pressure and a broader correction.

On the 8-hour chart, BTC has found solid support at the lower boundary of a broadening wedge pattern. This technical setup often signals increased volatility for breakout moves. After holding the lower edge of the wedge, bullish momentum is building, suggesting that BTC may be preparing for a leg higher. If this momentum sustains, the price could target the $108,000 level.

Additionally, Bitcoin is attempting a bounce from the lower boundary of a descending triangle on the 4-hour chart, a crucial support zone. This structure is typically a continuation pattern that can set the stage for a bullish counter-move. If BTC manages a decisive bounce from this lower support, it might trigger a move toward the $109,000 resistance level.

Adding to the bullish case, a buy wall has formed beneath the price, indicating increasing demand and trader confidence in holding the BTC uptrend. A Morning Star candlestick has also formed on the daily chart, a signal that precedes upward reversals. The emergence of this setup suggests that bearish momentum may be fading, giving bulls an opening to reclaim higher levels. Only one sell wall remains at $110,800, and if Bitcoin can break through this level, it might continue its rally.