Bitcoin (BTC) Price Action Remains Bullish Despite Short-Term Dip, Continuation Toward $125,400 Is the Base Case Scenario

Bitcoin recently experienced a pullback into a key support zone near $106,133, but price action remains bullish. Market structure suggests a continuation toward $125,400 if support holds firm.

Bitcoin (BTC) dropped a bit from recent local highs, but the broader technical picture still favors bullish continuation. The current pullback appears to be a healthy retracement into a key support zone, which could be used to springboard the next leg upward.

As market structure suggests, a continuation toward $125,400 is in the cards if support holds firm.

Key technical points

* Bitcoin’s decline from recent local highs triggered a wave of intraday selling pressure, but the correction landed precisely at a high-timeframe support level near $106,133. This region has historically been an inflexion point, with price either consolidating or reversing to continue its upward trend. The reaction at this level will be crucial in determining whether Bitcoin can maintain its bullish posture.

* Structurally, Bitcoin remains inside a well-defined upward channel. Previous moves within this channel have respected both the upper and lower boundaries, bouncing cleanly between support and resistance. The recent pullback aligns with the lower boundary of this channel, suggesting a potential rotational move back toward the upper boundary at $125,400.

* Supporting this bullish outlook is the fact that no major breakdown in market structure has occurred. The most recent swing low remains intact, and the price is still printing higher lows on higher time frames. If Bitcoin consolidates above current support and builds momentum, a continuation toward $125,400 becomes the base case scenario.

* In the short term, traders should be watching how the price behaves between $106,133 and $110,000. Staying above the lower boundary will invite more buying pressure and could lead to the breakout required for the next leg up. On the flip side, a confirmed loss of $106K would invalidate this structure and shift momentum in favor of sellers.

What to expect in the coming price action

As long as Bitcoin stays above the $106,133 support, price action is likely to grind higher toward the $125,400 resistance level. There may be some short-term volatility to anticipate, but the broader structure remains firmly bullish for now.

output: As the world's leading cryptocurrency, Bitcoin (BTC) has been a hot topic of discussion among traders and analysts. With the cryptocurrency markets beginning to heat up once again, all eyes are on Bitcoin to see what move it will make next.

After a strong rally throughout the first half of 2024, Bitcoin finally encountered some resistance near the $115,000 level. This led to a minor pullback, which brought buyers back into the market. As the price dipped below the $106,000 zone, sellers began to exert some pressure, setting the stage for a potential shift in market dynamics.

Bitcoin drops below key support

Bitcoin dropped below a key support level that could decide the next leg of the trend.

After a strong rally from the $90,000 zone to highs of nearly $115,000, Bitcoin encountered some resistance around that level. This led to a minor pullback, which brought buyers back into the market. As the cryptocurrency slid below the $106,133 zone, sellers began to exert some pressure, setting the stage for a potential shift in market dynamics.

This level has been a crucial point of interest throughout 2024, as it acted as strong support during previous declines. If this zone breaks down, it could open the door for further downside. On the other hand, if buyers manage to keep the price above this zone, it could set the stage for another attempt at the all-time highs.

From a structural perspective, Bitcoin is still trading inside a well-defined upward channel that began in December 2022.

Chart showing Bitcoin's upward channel and support level

Credit: TradingView

The upper boundary of this channel is around the $125,400 zone, which is the next logical point of resistance. As long as the lower boundary holds firm, it keeps the broader implication biased toward further gains.

Another key level to watch on the chart is the 200-week Simple Moving Average (SMA), which is currently around $90,000. This is a closely followed indicator by long-term traders, and a break below it could be seen as a bearish sign. However, the price has bounced off the 200-week SMA several times in the past, showing that it can provide support at key moments.

Looking ahead

Overall, the technical outlook for Bitcoin remains bullish despite the recent pullback. With support holding firm and no major breakdown in market structure, the path of least resistance appears to be up.

If Bitcoin can manage to stay above the $106,133 support zone and begin to build momentum again, it