Bitcoin (BTC) has shown reduced volatility and trading volume over the past ten days, following a retest of the $92K level in early February. While this lack of momentum might confuse swing traders, it presents several potential opportunities for short-term traders in the coming week.
Bearish Trend with Potential for a Rebound
On the technical front, Bitcoin’s 4-hour chart indicates a bearish swing structure. The price action suggests that a minor dip to the $95.2K level could precede a move toward $94K, with a rebound potentially following.
At the time of writing, Bitcoin was approaching the lower end of its current range. The 0.25 level in this range typically acts as a weak support or resistance, with stronger support often found at the 50% or 75% levels. The Relative Strength Index (RSI) on the 4-hour chart has dropped below neutral at 50, signaling that bearish momentum may be gaining traction.
Liquidity and Support Levels to Watch
The liquidity heatmap paints an interesting picture for the next price movement. The $94K area has been highlighted as a strong magnet for potential price action, with significant liquidation levels clustered in that range.
Bitcoin’s price is currently facing resistance around the $98K-$99K zone, where it has struggled to break through in recent weeks. A potential move to $94K would bring the price closer to that strong liquidity pocket, setting the stage for a possible rebound.
Low Volume Supports Short-Term Dip
One of the key factors contributing to Bitcoin’s current price action is its relatively low trading volume over the past several days. This lack of volume has kept Bitcoin’s On-Balance Volume (OBV) almost flat, signaling a lack of significant buying or selling pressure.
The weak volume behind the recent downward price movement suggests that the dip could halt at the $95K-$95.5K level, with the $94K region being a critical support area. As the market lacks strong momentum, the price could briefly dip to this range before bouncing back toward higher levels.
Key Resistance and Rebound Potential
Bitcoin’s price has encountered stiff resistance at the $98K-$99K zone in recent weeks. While the short-term outlook appears slightly bearish, there is room for a rebound if the price manages to hold at the $95K-$94K support area.
This scenario is supported by the 1-week liquidation heatmap, which shows that both the $94K and $99K levels are crucial liquidity zones. If the price breaks through the $94K support, Bitcoin could fall further; however, the expectation is for the price to find strong support at this level before moving higher.
What’s Next for Bitcoin?
This week’s price action suggests a possible minor dip toward the $95.2K level, driven by weak volume and a bearish short-term outlook. However, with a strong liquidity pocket at $94K and previous resistance at the $99K level, Bitcoin is likely to experience a rebound, creating an opportunity for traders to take advantage of price fluctuations.
For now, traders should keep a close watch on Bitcoin’s price around the $94K level. If it holds strong there, a return to the $99K zone could be on the horizon. However, any further dip below $94K could signal a deeper retracement, requiring close monitoring of market sentiment and liquidity levels.
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