After a surge following the Federal Open Market Committee (FOMC) announcements, Bitcoin (CRYPTO: BTC) is experiencing a period of price consolidation around $116,000. Market participants are carefully monitoring liquidity levels to assess its future direction.
Key Developments: Analyst Kevin highlighted on Patreon that Bitcoin is currently trying to establish a cup-and-handle pattern on the 4-hour timeframe. However, upward movement has met resistance near $118,000, just shy of the crucial 0.786 Fibonacci retracement level at $118,300.
He noted that the relatively low trading volume in spot markets, combined with decreasing liquidity, contributes to the recent sideways price movement.
Kevin emphasized a significant range between $106,000 and $118,300:
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Optimistic scenario: If the price breaks out above this range, a potential target could be $120,000 to $125,000.
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Pessimistic scenario: A breakdown below this range could lead to a decline toward $104,000 or even $100,000.
Analysis of liquidity heatmaps reveals short liquidity building up to $119,000, while long liquidity concentrates between $106,000 and $108,000.
While Bitcoin has outperformed its historical average performance for September, the combination of declining liquidity and a fluctuating rising channel suggests a potentially critical juncture for the market.
The resistance level at $118,000 and the support zone at $106,000 are poised to dictate the upcoming major price shift.
Further Reading: XRP ETF Launch Sets New Records, DOGE ETF Among Top Five: Is This a Digital Asset Revolution?
Looking Ahead: In a post on X dated Sep. 19, Kevin pointed out that Bitcoin has gained 24% year-to-date, showing no indications of a cycle peak. He expects the peak around the halving/cycle timing, typically in Oct–Nov, however indicators offer no current support of such expectation.
Castillo Trading commented that Ethereum (CRYPTO: ETH) and Bitcoin continue to experience “slow trade” after the FOMC statements, suggesting that an “interesting weekend” could be a test of the markets true strength and a determinant as to whether the markets strenght is real or fleeting.
Altcoin Sherpa echoed similar viewpoints, describing the current market activity as a “slow pullback” amidst broader weakness. The analyst is currently holding long positions but is prepared to adjust their portfolio if the downward trend intensifies.
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