Bitcoin Surges 10% Reclaiming Key Support Level

Bitcoin (BTC) has shown a significant recovery, rising 10% to $108,200 from its local low of $98,400. This surge has allowed BTC to reclaim a key support level, consolidating below its all-time high range of $112,000. The recent price action suggests that bulls are actively defending the $100,000 level, which could indicate a potential upward trend.

Analysts have identified a bull pennant pattern on the daily chart, which typically signals a continuation of an upward trend after a period of consolidation. If Bitcoin breaks above $110,000, it could potentially reach $165,200, representing a 54% gain from its current price. However, it is important to note that the success rate of a bullish pennant is only around 54%, making it one of the less reliable patterns.

Other analysts have shared similar bullish outlooks. Merlijn The Trader, for instance, predicted a BTC price of $140,000 based on an inverted head-and-shoulders pattern. Some analysts have even more ambitious projections, citing factors such as soaring US debt and tax cuts, which could push BTC’s top between $200,000 and $250,000. However, these projections are based on speculative factors and should be taken with caution.

Despite Bitcoin trading close to its all-time highs, with supply in profit above 96%, demand for BTC among exchange users has been decreasing. Data from onchain analytics platform CryptoQuant shows that the daily average volume of flows on exchanges hit a 10-year low on June 25. This decrease in exchange flows suggests that a significant portion of BTC has left the platforms, indicating consolidation and potential liquidity shortage.

Fewer inflows could mean that investors are moving their BTC into self-custody wallets, reflecting confidence in Bitcoin as a long-term store of value. Overall exchange BTC balances are at their lowest in seven years, with 2.92 million BTC as of June 25. This reduction in supply on exchanges means less Bitcoin is readily available for trading, which could potentially lead to higher prices in the long term.