Bitcoin experienced a notable recovery on Wednesday, climbing to $113,900 after dipping to lows of $111,500 earlier in the week. This rebound followed a brief test of the $111,000 mark during the Asian trading session, indicating potential strength in the market. Analysts observed that this bounce was supported by bullish signals emerging from the charts.
Key to the recent price action was the bullish divergence seen between the relative strength index (RSI) and Bitcoin’s price on both the one-hour and four-hour charts. This phenomenon occurs when prices hit lower lows while the RSI registers higher lows, often signaling a reduction in bearish momentum and hinting at a possible trend reversal.
The upswing in Bitcoin’s price also aligned with a retest of its daily order block, presenting a technical foundation for a further upward move towards $115,000. However, clearer confirmation will be essential for sustaining this momentum, especially with a critical four-hour candle close above $113,400 indicating a potential shift from bearish to bullish sentiment. Additionally, reclaiming the 200-period exponential moving average (EMA) on the four-hour chart could solidify positive market momentum.
Market responses to Bitcoin’s rebound have been mixed. Michaël van de Poppe, founder of MN Capital, praised the strength of the recovery but emphasized the importance of breaking above the 4H 20 EMA for continued upward movement. Conversely, crypto trader Crypto Chase warned that without a strong claim to the $113,400 to $114,000 range, Bitcoin risks a retreat back to levels around $107,000.
While the immediate recovery in Bitcoin’s price is notable, broader on-chain data gives a more nuanced picture. Recent reports highlighted a significant decline in holdings among whale entities, which have collectively sold approximately 147,000 BTC—valued at around $16.5 billion—since Bitcoin reached its all-time high of over $124,500 in August. This 2.7% reduction in whale holdings suggests ongoing selling pressure from larger investors, often viewed as a challenge for price recovery.
In contrast, other market indicators signal an atmosphere of relative calm. Bitcoin’s implied volatility has recently plummeted to levels not seen since October 2023, a phase that was followed by a substantial price rally. This low-volatility environment has led analysts to contemplate the possibility of a “quiet before the storm,” suggesting that current trader positioning may be building momentum for a significant move.
Supporting this perspective, data from CryptoQuant indicated that exchange reserves for Bitcoin are at multi-year lows, with fewer coins available for sale at current market levels. The Market Value to Realized Value (MVRV) ratio for Bitcoin is currently hovering near the neutral zone, indicating that there is limited pressure for either panic selling or significant profit-taking.
As the market navigates this complex landscape of whale-driven selling and tightening supply dynamics, investors remain cautious yet hopeful for the potential of a decisive price movement in the near future.
