Bitcoin’s next major rally hinges critically on how it navigates the $116,000 to $118,000 resistance zone, a pivotal range where the market’s direction will likely be decided. This zone represents the average cost basis for many recent short-term buyers, making it a key technical battleground between bulls and bears.
Key points about this price zone's significance:
Resistance at ~$116,900: Bitcoin has faced repeated rejection near $116,900, preventing decisive breakouts. This level aligns closely with the average price paid by short-term holders over the past month, making it a natural resistance point where profit-taking occurs.
Support and Accumulation in $110,000–$116,000: After dipping to around $112,000, opportunistic buyers accumulated roughly 120,000 BTC, showing demand below this range, but the supply remains thin around the resistance level.
Breakout Potential: A sustained move above $116,000–$118,000, especially with strong volume and bullish momentum, could trigger a powerful rally toward the $120,000 mark and beyond, potentially testing $131,000 or higher in a strong bull scenario.
Downside Risks: Failure to break above this zone may lead to a retracement, with support expected near $114,000, then $112,000, and even down to $110,000 or $108,000 if negative catalysts or selling intensify. This would erode short-term holder confidence and possibly trigger more selling.
Market Sentiment and Macro Factors: The current cautious sentiment is reflected in low derivatives funding rates and ETF outflows, with traders hesitant amid broader macroeconomic uncertainties. The expected U.S. Federal Reserve interest rate decisions and trade tensions could influence whether Bitcoin sustains gains here.
Technical Patterns: Analysts have identified bullish flags and wave counts suggesting a potential major uptrend if this resistance is surpassed. However, overbought conditions and liquidation heatmaps point to clustered leverage around this zone, meaning a false breakout or rejection could cause volatility.
In essence, the $116K to $118K range is a price “make-or-break” zone. Breaking through strongly would indicate renewed institutional and retail buying power, fueling further upside. Conversely, failure to hold it may signal a short-term top, leading to consolidation or pullback.
For traders and investors, watching trading volumes, whale and retail buying patterns, and macro news around this level will be crucial to gauge Bitcoin’s next move.