Bitcoin Surges 1.6% to $106,454, Setting New Records

Bitcoin has recently achieved a significant milestone, setting new records for both daily and weekly closes. On March 18, Bitcoin closed at $106,454 on Binance, surpassing the previous high of $104,463 from December. This new weekly close was accompanied by a daily close that edged higher by 0.29% ($310) compared to the previous record. This rally followed a strong accumulation phase established in early May at the $94K level, indicating a period of significant buying activity.

On-chain data reveals that this accumulation phase was marked by strong conviction from buyers, both on and off-chain. The Spot Cumulative Volume Delta (CVD) for major exchanges like Coinbase and Binance indicated growing bullish momentum since mid-April. Coinbase recorded a peak of $45 million in daily volume when BTC was near $80K, while Binance, which had experienced heavy net selling in April, saw this selling pressure ease significantly, becoming only a mild net seller. This exchange activity suggests that accumulation near local lows played a key role in fueling Bitcoin’s explosive rally toward $108K.

The accumulation was also evident on-chain, with the Cost Basis Distribution Heatmap showing a notable amount of supply acquired in the $85k region and even more intense accumulation in the $93k-$95k area. This area was expected to be a strong support zone, with Bitcoin unlikely to fall lower due to the amount of buying in that area. On-chain evidence of accumulation backed up evidence of buyer strength from the spot CVD on exchanges. The Realized Price for Bitcoin short-term holders (holding for less than 155 days) stood at $94.2K, aligning with the supply clusters visible on the Cost Basis Distribution Heatmap and reinforcing the strength of the $93K–$95K region as a key support zone in the event of a pullback.

Despite the bullish momentum, traders should be wary of short-term price dips. The 2-week liquidation heatmap showed a cluster of liquidation levels at the $106.6k region, which was swept and followed by a swift reversal. The next magnetic zone of note was at $98.4k-$101k, suggesting that Bitcoin is likely to drop further in the short-term. However, the highest daily and weekly closes on record also reflected bullish intent, with the overall sentiment remaining firm in the market.

Bitcoin's recent performance has sparked renewed optimism and speculation about its future trajectory. The cryptocurrency's ability to hold steady around $105,000, up 1.6% in the past 24 hours, signals strong bullish momentum. This stability, coupled with the recent breakout above the crucial resistance level of $101,600, suggests that Bitcoin could be poised for a significant breakout, potentially reaching $120,000. This prediction is based on the cryptocurrency's current price action and the formation of a triangle pattern, which is often seen as a bullish continuation pattern.

However, the cryptocurrency market is known for its volatility, and Bitcoin's recent dip to around $103,000 raised concerns of a short-term correction. This price movement wiped out Sunday's gains, highlighting the potential for fluctuations in the near term. Despite this, the overall sentiment remains bullish, with many analysts and investors believing that the recent price action is a sign of a broader bull market. The cryptocurrency's recent surge above $106,000 on Sunday, after closing in a tight $103,000-$104,000 range for most of the week, further strengthened its risk-on sentiment. This price movement was driven by a combination of factors, including the recent downgrade of the US credit rating, which led to increased demand for safe-haven assets like Bitcoin. The cryptocurrency's ability to maintain its bullish momentum in the face of such market volatility is a testament to its growing acceptance and adoption as a store of value.