Overnight, Bitcoin price once again rose above the key psychological level of $110,000, with mainstream Altcoins such as ETH, HYPE, and LINK also achieving gains of 5% to 8%.
However, the overall signal in the cryptocurrency market remains cautious. Data shows that market positions do not fully suggest that a top is forming. So, is Bitcoin currently accumulating strength for further breakthrough, or might it face a pullback after high-level oscillation? This article will analyze from a technical perspective, explore market sentiment, and forecast next week's trend.
Technical Analysis
BTC opened this week at 105,835 points. From the K-line pattern, it formed a candlestick with a lower shadow, which typically means that buyers and sellers are in a stalemate, but sellers have a slight advantage, revealing cautious market sentiment.
From a technical perspective, since reaching a new high of 112,345 points, the upward momentum has significantly weakened, with the momentum model showing a blunted state, which is often seen as a precursor to a potential top divergence in technical analysis. This means that if there is no significant volume increase or only maintains a high-level oscillation, the risk of a pullback will gradually increase.
Market sentiment indicators also corroborate this caution. Two weeks ago, the sentiment indicator soared above 90, reaching a maximum intensity close to 8, in a severely overbought state. The recent minor adjustment has caused the sentiment indicator to decline, serving as a stage of cooling down and helping the market return to rationality.
K33 Research's research director Vetle Lunde also pointed out that despite Bitcoin's price being close to its historical high, the entire crypto market's positions still reflect a generally defensive posture.
He stated: "Funding rates and other leverage indicators point to continued cautious market sentiment." This contrasts with Bitcoin's typical high funding rates at the top. Lunde further explained that Binance's Bitcoin perpetual contracts showed negative funding rates on multiple trading days last week, with an average annualized funding rate of only 1.3%, which is usually associated with local market bottoms rather than tops. He emphasized that Bitcoin's price typically does not reach its peak in an environment with negative funding rates, and such positions have historically predicted subsequent rises rather than corrections.
Similarly, the capital inflow of leveraged Bitcoin ETFs confirms this defensive configuration. ProShares 2x Bitcoin ETF (BITX) currently has a Bitcoin exposure equivalent to 52,435 BTC, far below its peak of 76,755 BTC in December 2023, and the capital inflow is still insufficient. Lunde believes that this defensive positioning leaves room for a potential "healthy rebound" for Bitcoin.
Looking ahead, the key is whether it can effectively break through and stabilize at important resistance levels.
We will focus on whether Bitcoin's price can successfully break through the previous high of 111,970.17, or even the stronger 112,500 points. If it can break through with volume and firmly stabilize, Bitcoin will have the opportunity to further challenge the key resistance level of 131,000 points.
Conversely, if Bitcoin fails to effectively break through these resistance levels and begins to fall back, the support levels to watch will be $105,000, the $100,000 round number, and 98,000 points.
Strategy Recommendations
Based on the above analysis, here are my current personal trading strategies:
Currently, Bitcoin's price is still running above the red and green channel. For existing long positions, continue to hold and gradually adjust the take-profit level upwards to protect existing floating profits.
I will continue to closely monitor changes in momentum and sentiment indicators. Once the market shows clear top divergence signals or sentiment intensity becomes extremely high and reaches a severely overbought state, I will consider adjusting positions promptly to avoid potential market pullback risks.
Of course, if you want to perform more precise short-term operations, you can combine 60-minute or 120-minute K-line charts for judgment, as these shorter cycles can provide more timely and detailed market signals.
Warm Reminder: All analyses and views in this article are my personal understanding of the market and do not constitute any form of buying or selling advice. The market is risky, and investment requires caution. Please all readers make independent investment decisions based on your own circumstances and bear the corresponding risks.
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