Bitcoin (BTC) price could pullback to $90,000 before breaking out to new highs

Traders expect a Bitcoin price pullback to $90,000, but a bull flag could break out to new highs if profit taking near the range highs reduces.

Key takeaways:

Traders expect a Bitcoin price pullback to $90,000, but a bull flag could break out to new highs if profit taking near the range highs reduces.

On-chain data suggests the current profit taking is too weak to extinguish Bitcoin’s current price momentum.

Bitcoin (BTC) price has spent the bulk of the week pinned below $104,000 to $105,000, which many analysts have labelled as a resistance zone, but an alternative view suggests that BTC is simply consolidating within a bull flag.

A bull flag is a continuation pattern that is characterized by a period of sideways price action following a sharp uptrend, and when the structure confirms or breaks from the trendline resistance, the uptrend continues. Mentioned in today's report:

BTC price stalls after hitting apex

Despite the impression that Bitcoin has stalled in its tracks after a strong rally to $105,900 on July 18, on-chain data suggests that the current profit-taking activity is not strong enough to extinguish BTC's current price momentum.

On-chain analysis firm Glassnode highlighted in its latest weekly report that short-term holder supply profit and loss data shows some profit taking on Monday.

"This aligns with the narrative of traders booking gains after a swift ascent, especially considering that the bulk of the move occurred within a three-week period. However, the realized profit or loss total remains comfortably within the statistical norm, leaving room for further price upside."

Chart via Glassnode showing Bitcoin short-term holder supply profit and loss

After a turbulent few months for crypto traders, with a bear market, a U.S. Securities and Exchange Commission lawsuit against major crypto exchange Coinbase and reports of a potential U.S. default, the markets have seen a shift in trend.

This has brought about a notional close to the futures and leveraged products markets, and with the bulk of Bitcoin's apparent sell-side liquidity having been absorbed during the move to $105,000, some analysts warn that a brief flush down to test $100,000 to $90,000 as support could be the next move for BTC price.

Bitcoin market liquidity resource Material Indicators said, "Barring "a serious catalyst," (which isn't necessarily a bad thing), I think BTC has a legit support test at $100K, and FireCharts show that the order book is priming for that with asks stacking and bids moving lower."

Sharing his view with X followers, analyst Daan Crypto Trades said that the bulk of bullish and bearish narratives with the potential to impact Bitcoin's price action have "cleared up" and he noted that BTC price has stalled near its all-time high while stocks have continued to rally after President Trump's US-China trade deal was confirmed.

The analyst said that "$90K remains my long-term line in the sand for spot exposure," adding that he is "cautiously bullish" with price above $90,000 but that is dependent upon how US equity markets perform in the short term.

"My bias is still bullish, but I'm watching closely as we're approaching a crossroads. If we break down, I'll be closing out longs and looking for short opportunities. But if we manage to hold up and continue higher, I'm prepared to add to my existing positions."