Bitcoin Nears Record Monthly Close, Eyes $110,000 Breakout

Bitcoin (BTC) is on the cusp of a significant milestone, with the potential to set its highest monthly close in history. If the price closes above $102,400 by the end of the month, it would mark a new record, indicating that the bull market is continuing at a rapid pace. This development comes after Bitcoin achieved a record weekly close of $106,407 on May 18.

Bitcoin is currently in a phase where it is close to entering a ‘price discovery’ period. This phase occurs when buyers and sellers interact in an undefined or non-traded range to determine the market price of an asset. A break above Bitcoin's all-time high of $110,000 would initiate this price discovery phase, driving BTC into an uncharted trading range with successive higher highs until a new equilibrium between supply and demand is established.

According to crypto trader Jelle, Bitcoin is inches away from this price discovery period. This phase is crucial as it could lead to significant price movements. The current market trend suggests that Bitcoin is poised for a breakout, which could send the price to new highs. The potential for a price discovery phase above $110,000 is supported by the historical precedent of Bitcoin's price movements during previous bull cycles.

Bitcoin researcher Axel Adler Jr. has identified a key technical pattern in Bitcoin’s current bull cycle, noting three recent instances of “compression”—a period of tightening price ranges—measured by rolling maximum/minimum over 180 days. This compression often signals an impending breakout, with historical precedent set by the 2017 rally when Bitcoin surged to $20,000 from $1,000. The chart indicates that volatility is building within the current cycle, mirroring the 2017 cycle where the Bitcoin halving events and supply shocks fueled retail FOMO, driving major price rallies.

From the perspective of Bitcoin liquidation, over $3 billion in short leveraged positions are at risk of being liquidated if the BTC price moves to $110,000 from $105,000. In contrast, it would take a drop to $94,612 to trigger a similar amount in long liquidations. This skew suggests a higher probability of the price pushing upward to chase liquidity on the sell-side rather than dropping lower. Technical analyst Gert van Lagen noted a similar outlook, stating, “A liquidation magnet is glowing above $107K, ready to vaporize billions in shorts. First, BTC soared on fear. Next, it'll rise on liquidations.”

This analysis suggests that Bitcoin is poised for a significant price movement, with the potential to vaporize short positions and drive the price to new highs. The current market trend, combined with the technical patterns and historical precedent, indicates that Bitcoin is in a strong bullish phase. Investors and traders should closely monitor the price movements and be prepared for potential volatility as Bitcoin enters this price discovery phase.