Bitcoin Retests $106,500 Resistance, Faces 27.1% Correction Risk

Bitcoin is currently at a critical juncture, retesting a significant resistance level at $106,500. This price point has historically proven to be a formidable barrier, with previous attempts to breach it resulting in price rejections in December and January. The outcome of this retest will be pivotal in determining the short-term trajectory of Bitcoin's price.

If bullish investors can muster enough market demand to overcome this resistance, Bitcoin could potentially sustain its upward momentum, with an initial target of $120,000. However, a failure to break through this level could lead to a significant price correction, pushing Bitcoin below the crucial $90,000 support zone and potentially as low as $75,000. This scenario would represent a 27.1% decline from the current price, despite the prevailing bullish sentiment.

The Relative Strength Index (RSI) indicates that Bitcoin has recently moved out of the overbought territory, suggesting a potential price correction. However, macroeconomic factors such as the 90-day tariff truce between the US and China, along with strong institutional investment, could bolster the chances of a continued bullish trend.

At the time of writing, Bitcoin is valued at $103,355, reflecting a 1.62% decline over the past week. Nevertheless, the asset's monthly performance shows a 21.46% gain, indicating that most new market entrants are still in profit. The Fear & Greed Index stands at 74, signaling a high level of greed among investors. Analysts predict that Bitcoin could reach $127,872 in the next five days, followed by a correction to around $111,616. For long-term investment, the analyst projects Bitcoin to hit a valuation of $155,583 in three months and $148,167 in six months.

The bullish sentiment is further supported by the recent net weekly investments in US BTC spot ETFs, which have seen an inflow of almost $2 billion. This influx of capital suggests that institutional investors remain optimistic about Bitcoin's prospects, despite the potential for a short-term correction. The current price action and technical indicators highlight the delicate balance between bullish and bearish forces, with the outcome of the $106,500 resistance test being a key determinant of Bitcoin's near-term direction.