Bitcoin (BTC) Price Stalled After Testing $104,000 Resistance: Time to Buy the Dip?

Bitcoin experienced a notable surge earlier this week, climbing above the $104,000 mark and registering a weekly gain of nearly 10%. However, after reaching this level, the asset appears to have encountered resistance

Bitcoin price dropped slightly on Wednesday, pausing its recent rally as traders assessed the cryptocurrency's technical setup amid signs of short-term uncertainty.

At the time of writing, BTC is trading at $103,663, reflecting a modest 1.7% decrease over the past 24 hours.

One of CryptoQuant’s top analysts, Darkfost, offered an analysis of why the world’s leading cryptocurrency has stalled at these levels. According to the analyst, the slowdown appears to be linked to the activity in the derivatives market.

Specifically, Darkfost pointed out that the cumulative net taker volume has remained in negative territory since BTC crossed above the $100,000 psychological threshold. This suggests that there are more aggressive sell orders (shorts) than buy orders (longs), creating pressure for lower prices.

The analyst explained that net taker volume is a useful gauge of real-time trader sentiment. When it trends negative, it usually signals that market participants expect prices to drop, leading to more short-selling.

This imbalance in derivatives market suggests that traders are increasingly skeptical about Bitcoin’s ability to reach a new all-time high in the very short term.

“The main reason why BTC is currently stuck at these levels comes from the derivatives market,” Darkfost wrote on X, formerly Twitter.

“The cumulative net taker volume has mostly remained in negative territory since BTC climbed back above the psychological $100 000 level.

What does this mean ? 0In simple terms, there has been more selling pressure than buying pressure on BTC. This is despite the fact that BTC managed to rally from $90 000 to $108 000 and is still holding above $100 000.”

Another technical analyst, Javon Marks, offered his own insights into the recent price action. According to Marks, Bitcoin appears to be forming a bull flag pattern. This technical formation is usually seen as a pause in an uptrend before the continuation of the move.

“Bitcoin looks to be bull flagging right under all-time highs. A breakout can send it above $108 000 to new all-time highs.”

Moreover, Marks highlighted that altcoins are exhibiting behavior similar to previous market cycles. He pointed out the surges seen in 2017 and 2021. According to the analyst, the current phase may precede a broader altcoin rally, which historically follows Bitcoin’s moves.