Bitcoin closed in on a historic milestone on Thursday, crossing $100,000 for the first time. While the rally was fleeting, BTC retraced sharply as it retreated to a low of $90K early Friday morning with price recovering to $98K as of writing. BTC experienced a sharp correction, dropping to a low of $90K Friday morning before recovering to trade at $98K as of writing.
This week Bitcoin’s price movement can be attributed to institutional buying pressure, whale activity and positive sentiment on the upcoming SEC Chairman in the United States. As the data by Coinglass revealed recently, Bitcoin Spot Exchange Traded Funds (ETF) attracted $2.4 billion during this week, compared to a net outflow of $136.5 million in the previous week, thus suggesting more institutional demand.
In the corporate interest area, the MARA Holdings, a Bitcoin mining company increased their Bitcoin holdings from 17,000 BTC to 22,000 BTC and the total portfolio value of assets is now equivalent to $2.17 billion. At the same time, a whale purchased 600 BTC worth $58.85 million to bring their portfolio to 1,300 BTC in the last two weeks, helping propel Bitcoin higher.
Despite a high institutional interest, there might be a short-term correction. Bitcoin’s Relative Strength Index (RSI) suggests a bearish divergence, indicating that momentum may be weakening. Historically, such divergences have preceded sharp price drops.
Moreover, there is on-chain data from Santiment’s Network Realized Profit/Loss (NPL) that testifies to the fact that more Bitcoin holders took profit. Previous moves to profit-taking have prompted corrections of 10% or more, meaning that Bitcoin may recover the support level of $90K and even $85K.
Bitcoin’s initial area of resistance now is at its all-time high of $104,000, while the nearest support levels are $90K and $85K. It’s important to trade with care, especially in leveraged sections such as the futures markets due to the high levels of volatility.