Is Bitcoin’s Surge Sustainable or Prone to a Correction?

Bitcoin remains stable around the $108,000 level, oscillating within a tight range following its notable ascent from April lows. The current price movements indicate underlying strength, although the momentum appears to have slightly diminished, setting up for a crucial few days.

Technical Assessment

Daily Overview

On the daily overview, BTC is positioned above the 100-day and 200-day moving averages, which align in the $90,000 to $96,000 range, having recently crossed in a bullish manner. The RSI stands at approximately 63, indicating that the rally has not yet reached an overbought state, though it is approaching the upper limits.

A solid consolidation around the $108,000 mark could lay the groundwork for another upward movement, contingent on sustained bullish momentum and supportive volume for a breakout.

4-Hour Overview

In the 4-hour overview, a rising channel structure is evident; despite a recent breach of the lower trendline, the price has successfully defended the horizontal support at $106,000. This level has transformed into an intraday support area.

The RSI hovers around the neutral 50 level, reflecting a balance in momentum following a brief correction. A definitive break and closing above $109,000, along with a return to the channel, may initiate a rally toward the $112,000 to $115,000 range, whereas a dip below $106,000 could lead to a short-term correction down to the $102,000 to $100,000 region.

Market Sentiment

Exchange Holdings

Current on-chain data continues to showcase a bullish outlook. Exchange reserves have reached their lowest levels in several years, now at roughly 2.4 million BTC. This persistent decline suggests that investors are withdrawing BTC from exchanges, likely for long-term holding, which diminishes sell-side liquidity.

As supply tightens and prices rise, the environment is conducive to increased valuations, especially if broader market conditions remain supportive and demand from institutional investors stays robust.