Bitcoin and the rest of the cryptocurrency market recently experienced a significant pullback after failing to maintain the gained levels. The BTC price dropped below $107K, causing Ethereum and other altcoins to follow suit. This downward trend coincided with a sell-off in the stock market, creating a challenging environment for investors.
Despite these challenges, Bitcoin continues to show strong potential for reaching a new all-time high in the near future. Institutional investors are increasingly showing interest in Bitcoin, while retail investors have yet to fully enter the market. Google search trends indicate that retail interest in Bitcoin is only half of what it was in November 2024, suggesting that smart money is quietly accumulating Bitcoin without causing hype or frenzy.
Funding rates in the futures market are currently neutral, indicating that leverage is under control and there are no signs of overexposure. This healthy market structure bodes well for the future of Bitcoin, with the price holding above $100K and setting up for further upside potential.
The question on everyone’s mind is whether Bitcoin’s price will rise to $120K or drop to $100K. Recent events, such as Donald Trump’s announcement of a 50% tariff on EU imports, have triggered market volatility and led to a sharp drop in Bitcoin’s price. While the price has since bounced back from its lows, the momentum remains fragile and caution is advised as Bitcoin trades within a compression zone.
Bitcoin is currently caught between two major fair value gaps, which will likely determine its next market direction. If the bulls can reclaim the $109K to $110K area, they could gain momentum and push the price towards higher resistance levels. However, a failure to hold above $107,000 could result in a drop to the liquidity pool around $106K.
It is crucial for Bitcoin to avoid getting trapped in the middle range and to fill one of the fair value gaps before the monthly close. The current trade setup suggests a major compression, highlighting the importance of monitoring market movements closely in the days ahead. Despite the recent challenges, Bitcoin’s long-term prospects remain strong, and investors are eagerly awaiting the next move in the market.