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After experiencing extreme volatility last week, Bitcoin has returned to the uptrend this week.
Affected by geopolitical tensions, the leading cryptocurrency fell below the $100,000 mark last week, but then rebounded strongly, rising more than 5% in less than 48 hours. This rapid rebound highlights the extremely volatile market.
However, as the situation in the Middle East eases, investors are turning back to risky assets. Bitcoin has risen for four consecutive days since Monday.
Bitcoin rose 0.4% during the Asian session on Thursday, breaking through the $108,000 resistance level and consolidating above this resistance level.
Source: TradingView
What's next?
Bitcoin's bulls pushed the price above the $108,000 resistance level and will test the $108,200 area.
A close above the $108,200 resistance level may push the price higher. In this case, the price may rise and test the $110,000 resistance level. If it continues to rise, the price may come to around $112,000.
However, liquidity data shows that Bitcoin is still at risk of falling.
According to CryptoQuant data, the average circulation of Bitcoin has dropped to the lowest level in 10 years. Generally speaking, the reduction in exchange activity indicates that investors lack confidence, are hesitant to trade, or that Bitcoin is under the potential threat of supply tightening.
The current decline in liquidity indicates that the market is still in a consolidation phase. Although the current price of Bitcoin looks relatively stable, the lack of a clear trend direction makes investors uneasy. Both bulls and bears are waiting for clearer macro or technical signals.
From the technical indicators, if Bitcoin fails to break through the resistance level of $108,500, it may fall again. The current support level is around $107,400 and near the trend line. Another major support level is at $105,500.
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