Bitcoin has just experienced a strong volatility that caught the trading community off guard. After soaring to $106,000, the cryptocurrency quickly dropped to $103,000 within a few hours, leading to over $600 million USD in trading positions being liquidated – a strong blow to both the bulls and bears.
This volatility occurs on a quiet weekend, when liquidity is thin and most trading activity is driven by automated algorithms. Nevertheless, Bitcoin is still holding steady around the high price range and continues to be the focal point of attention amid soaring inflation and a globally unstable economy.
$106,000 – The "Impenetrable Wall"
According to Mags, a well-known trader in the crypto community, the current $106K level has become a key barrier in Bitcoin's bullish journey. This is the third time Bitcoin has approached the peak of the current trading range but has not yet managed to break through successfully.
Although rejected at this level, Mags believes that this is a more positive than negative sign. The reason is that after reclaiming the trading range, Bitcoin often needs one or several tests of the resistance before it can truly break out. This aligns with the natural movement patterns of the market.
Two Potential Growth Scenarios
Mags presents two potential scenarios that he believes are leaning towards an upward trend in the near future:
Scenario 1: Short accumulation followed by a strong breakout
Bitcoin may hover just below the $106K resistance level for a short period before suddenly breaking out and rising sharply. This is a rare but very strong type of breakout, often occurring when the market is unprepared and caught off guard. If this happens, it could signal the start of a strong upward rally.
Scenario 2: Slight correction before continuing to rise
The second scenario is somewhat "healthier" – that is, Bitcoin will have a slight correction towards the middle of the trading range, around $99,400. Mags notes that a slight dip below this level is not negative, but merely a necessary pullback for the market to build up momentum. This process may take longer but will create a stronger foundation for sustainable growth ahead.
Positive Outlook Remains Intact
Despite being rejected at this important resistance level, both scenarios above indicate that the market is still on an upward trend. Mags emphasizes that the current price action is not a bearish signal but rather a natural accumulation process before continuing the upward trend.
Traders are now closely watching to see whether Bitcoin will break out immediately or need more time to adjust before moving forward. In either case, market sentiment remains optimistic, with expectations that Bitcoin will soon surpass the $106K barrier to open a new chapter in the bullish cycle.