A Familiar Signal Flashes for Bitcoin
Bitcoin is currently flashing a technical signal that previously preceded a significant price rally, drawing the close attention of traders and corporate treasuries. The key to the next major move now hinges on a single, critical price level on the chart.
The signal in question is a hidden bullish divergence on the Relative Strength Index (RSI). This pattern emerged as Bitcoin’s price formed higher lows between late June and mid-October, while the RSI made lower lows. This specific setup indicates that selling pressure is fading even as the price consolidates, often signaling that a trend is ready to continue. The last time this exact pattern appeared, it triggered a 15.7% rally in Bitcoin’s price. If history repeats, a similar move from current levels could project a price target near $119,900.
This technical outlook is supported by on-chain data suggesting that larger entities are accumulating Bitcoin. The Accumulation Trend Score, which tracks the buying behavior of different wallet groups, has climbed, indicating that whales and funds are in active accumulation mode. This provides a fundamental backbone to the bullish technical structure, suggesting the current stability isn’t driven by retail alone.
The Decisive Level for the Next Major Move
While the signal is promising, all eyes are on the formidable $116,500 resistance level. This price zone has acted as a ceiling, stalling every rally attempt since mid-October. A daily close above this level is the crucial line in the sand that would confirm the bullish setup and likely trigger a move toward the $119,700 target and potentially beyond.
Analysts echo this sentiment, noting that a break above key resistance is what’s needed for a sustained uptrend. Popular crypto analyst Michael van de Poppe has stated that a break above $112,000 could be the catalyst for Bitcoin to reach a new all-time high, emphasizing the importance of these technical thresholds.
For market participants, the implications are direct. A confirmed breakout could lead to a surge in derivatives activity, with open interest growing as new positions are opened. Conversely, a rejection from this level could trigger forced liquidations of leveraged long positions and increase volatility, prompting treasury desks to potentially reduce exposure until a clear direction is established.
Navigating the Crossroads
In the absence of granular data like volume and funding rates, the price action around this key level becomes the primary guide. The market is at a crossroads, and the path of least resistance will be determined by its ability to conquer this technical hurdle.
For now, the prudent strategy for traders and treasuries is to watch the $116,500 level closely. A decisive close above it would validate the bullish signal and suggest further upside is probable. However, a failure to break through, especially if the price loses the nearby support around $110,000, would invalidate the optimistic setup and signal a need for a more defensive posture.
