Bitcoin Sees Bounce From Key Demand Zone, But What’s Next?

In an X post on July 26, KillaXBT provides an in-depth technical analysis of the Bitcoin market to map out the asset’s potential price trajectory in this new week. The popular market expert duly notes that Bitcoin experienced a price bounce after dipping into a key demand zone around $115,000, which they also described as an ideal long entry region.

As earlier stated, the crypto market leader has since climbed to $118,000 following this price rebound. However, KillaXBT notes there is an established CME Gap around $117,071, which is likely to serve as a price magnet in the short term. For context, CME gaps are price gaps on the Chicago Mercantile Exchange (CME) Bitcoin futures chart that occur when Bitcoin’s price moves significantly on the spot market when CME markets are closed, typically over the weekend.

In view of next week, KillaXBT explains scenario 1 in which the Bitcoin market opens on a bullish note. In this case, the analyst states investors should expect Bitcoin to eventually form a higher low, ideally through a sweep of liquidity around the $116,000 area. However, if Bitcoin bulls can effectively hold this price pocket, it would trigger fresh long setups with stop losses tucked below the prior week’s low.

In scenario 2, KillaXBT paints a more aggressive situation in which Bitcoin performs a double sweep of last week’s wick low around $114,800, thereby effecting a ruthless liquidity grab before an upward reversal. However, the market expert favours the reality of scenario 1, following the earlier liquidity grab with the price dip to $115,000.

The Invalidation Risk

Regardless of which scenario, KillaXBT has highlighted certain developments that could neutralize the prospects of a bullish reversal. In particular, the analyst explains that failure for the price to hold above the recent wick lows following a retest would force Bitcoin prices to deeper imbalance zones between $112,000 – $113,800.

At the time of writing, Bitcoin trades at $117,900, reflecting a 0.21% gain in the last seven days.

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After a sharp dip to $81,254, Bitcoin is once again capturing attention as signs of a potential rebound begin to surface. The recent bounce from this critical level has given investors a glimmer of hope that the worst may be over for now. While the crypto giant had been under intense selling pressure, its ability to hold firm at this support zone has raised speculation that a recovery phase could be in motion.

Market participants are cautiously optimistic, watching closely as BTC tests key resistance areas that could determine its next direction. Though uncertainty remains high, Bitcoin’s resilience at $81,254 is seen as a positive signal, potentially attracting renewed buying interest and reigniting bullish sentiment across the market.

From Support To Surge: Analyzing Bitcoin’s Next Potential Targets

In a recent post on X, Gdudocq identified the $81,332 level as a pivotal support zone that might serve as the launchpad for Bitcoin’s next leg up. According to the analyst, this level marks a key structural base where buyers have started to regain control following the latest market dip. 

According to him, since touching $81,332, Bitcoin has already staged a notable rebound, climbing over 2.9% and now trading slightly higher, which is an early sign that bullish momentum may be re-entering the scene. This move has injected renewed optimism into the market, with many investors closely watching to see if BTC can sustain this recovery and target higher resistance levels.

He further identified a critical resistance zone between $84,576 and $86,000, highlighting it as the next major hurdle for Bitcoin’s upward momentum. According to the analyst, this range has historically acted as a supply zone, where previous rallies have either stalled or reversed due to increased selling pressure. The area represents a confluence of technical resistance, including previous highs and key Fibonacci retracement levels, which makes it a significant battleground between bulls and bears.

What The Technical Indicators Say

Technical indicators play a crucial role in deciphering market sentiment and helping traders gauge the next direction of an asset’s price. In the case of Bitcoin’s recent movements, key technical indicators are currently displaying bullish signals that suggest potential for further gains.

For instance, the Relative Strength Index (RSI) is currently showing signs of an upward as it attempts to move above average. This could indicate that Bitcoin is experiencing renewed buying interest and may be entering a more favorable phase for bulls. 

Also, the Moving Average Convergence Divergence (MACD) recently showed a positive crossover, which suggests growing bullish strength in the short term. This bullish crossover occurs when the MACD line crosses above the signal line, indicating increased bullish pressure.

Featured image from Unsplash, chart from Tradingview.com

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Bitcoin RHODL Has Been Losing Momentum Recently

In a new post on X, analyst Checkmate has discussed about the latest trend in the RHODL Ratio of Bitcoin. The “Realized HODL (RHODL) Ratio” is an on-chain metric that calculates the ratio between any two given RHODL wave bands.

HODL wave bands keep track of the percentage of the total BTC supply that was last moved inside a given age range. The RHODL wave bands are a modified form of these, adding an additional weighting factor: the Realized Value.

Put simply, the Realized Value is the spot price at which a given token of the cryptocurrency was last transacted on the blockchain. That is, it’s the coin’s current cost basis.

As the RHODL wave band multiplies this metric with the amount of supply present within a given band, it tells us about the sum of cost bases of coins in that band. When the value of the indicator goes up for any particular band, it means the amount of capital invested into coins falling in the age range is rising.

In the context of the current topic, the RHODL Ratio of the 1 week and 1 to 2 years bands is of relevance. Below is the chart shared by the analyst, that shows the trend in this RHODL Ratio over the history of Bitcoin.

As displayed in the above graph, the Bitcoin RHODL Ratio for these wave bands shot up to a high level during the rally beyond $100,000 that took place last year. Such a trend implies the 1 week wave band, which corresponds to the fresh capital coming into the sector, grew large relative to the veteran 1 year to 2 years band.

From the chart, it’s apparent that an extreme rotation of capital into the 1 week wave band has historically coincided with bull run tops for the cryptocurrency’s price.

Since last year’s peak, the metric has been on the way down, which suggests the new demand for the asset is now slowing down. This is also visible in the momentum oscillator for the indicator attached by the analyst on the bottom, which just dipped into a zone that has played the role of the transition region between bullish and bearish trends in the past.

Considering the historical pattern, this development in the RHODL Ratio is certainly not the best for Bitcoin. It now remains to be seen whether the metric would continue its decline in the coming days, potentially signaling a transition away from a bull market, or if it will bounce back up.

BTC Price

Bitcoin made a retest of the $98,000 mark earlier today, but it appears the coin ended up finding rejection as its price is now down to $97,000.