Bitcoin Tries to Consolidate Gains as Bulls Eye New All-Time High

Bitcoin (BTC) staged a sharp rally Wednesday and attempted to extend its upward trajectory on Thursday. Analysis suggests the pair’s breakout above the $109,000 level has invalidated a bearish chart pattern, potentially allowing bulls to challenge new all-time highs.

Markus Thielen, Head of Research at 10x Research, posited Bitcoin could potentially surge towards $116,000. His reasoning cited strong inflows into spot Bitcoin exchange-traded funds, uncertainty surrounding Federal Reserve policy, and a concurrent decrease in Bitcoin supply on major crypto exchanges.

While the price action signals sustained demand from bulls, significant risks remain. Uncertainty surrounds whether this rally can maintain momentum above recent highs or if aggressive selling could trap buyers.

Technical Breakdown: Near-Term Support and Resistance

The Feb. 6 close just above $109,000 reversed a bearish descending triangle pattern, a structure typically associated with a potential upward breakout, suggesting bullish conviction remains intact among buyers.

Indicators reinforce this outlook, with the moving averages displaying an upward slope and the Relative Strength Index (RSI) remaining in positive territory, both favoring buy-side sentiment.

Key resistance is expected at the neckline of a potential inverse head-and-shoulders pattern. Bulls would need to hold territory near this level to signal a potential rally towards the pattern’s $150,000 target. Conversely, sellers must prevent the price from slipping below the major moving averages to avoid triggering a correction back towards the $105,000 support level, potentially followed by a $100,000 touch.

Shorter-Term Dynamics

The 4-hour chart confirms recent strength. BTC broke decisively above the downtrend line connecting recent lows and retested that level successfully, signaling bulls are attempting to transform this former resistance zone solidly into support.

Ongoing buying interest, indicated by rising momentum and positive momentum indicators, suggests bulls retain the advantage.

Bears, however, are unlikely to concede defeat easily. The price zone clustered around $110,500 to $111,980 represents critical overhead resistance. A temporary pullback from these levels, provided support from the moving averages holds, wouldn’t necessarily negate the bullish momentum. Conversely, a sustained breakdown below the moving averages would signal bearish control and likely target the $105,000 region.

Every investment and trading move involves substantial risk. This analysis does not constitute investment advice.