Bitcoin just had one of its most dramatic moments and pierced through the bottom side of its almost decade-old upward channel. This decline was catalyzed by heightened selling pressure, exacerbated by rising geopolitical tensions between Russia and the US. The digital asset has since found footing and begun a recovery, with investors now left to consider its further direction.
In fact, Bitcoin’s most recent futures order flow data suggest a stampede of new small-sized positions. This increase shows that retail traders are playing against the trend inside the $112K–$118K area. Its capacity to maintain above the $112K support level serves as evidence of solid market demand. As Bitcoin declined, the $112K level successfully stopped the decline, resulting in a rebound towards the previously broken channel boundary near the $116K region.
Key Support Range
The $112K–$118K range is particularly significant. This retracement range is consistent with the 0.618 Fibonacci retracement level and is the lower bound of a bullish flag pattern. Bitcoin’s success at closing above this range would indicate a strong market structure.
This support range is home to a big breaker block, adding to the significance of the heavy demand found here. Provided support under Bitcoin stays intact around the $112K level, the overall sentiment continues to be bullish.
The $112K level successfully halted the decline, initiating a rebound toward the previously broken channel boundary near the $116K region for Bitcoin.
Potential Scenarios
Near-term volatility likely continues, particularly in the Bitcoin $116K retest zone. When the retest, if done at all, is done, a secondary rejection becomes probable. This may even bring about another bullish BTC price shakeout to retest Bitcoin’s support at $112,000.
Should Bitcoin burst out of its ongoing consolidation phase, it may ignite a new bullish uptrend. Such continued activity could pave the way for some meaningful upward momentum. The current Bitcoin consolidation, with the potential for a renewed bullish rally should a strong breakout happen.
Continued sideways consolidation inside the flag pattern is most probable before any major breakout takes place for Bitcoin.
Market Outlook
Bitcoin investors should pay careful attention to price behavior at or near this range of $112K–$118K. A confirmed hold above this level would reinforce the bullish sentiment, while a break below could signal further downside potential.
The increase in retail activity suggests heightened interest in Bitcoin, but warrants caution due to the potential for increased volatility. Thus, market participants should stay tuned and keep in mind the potential influence of geopolitical events on Bitcoin’s future price fluctuations.
