Bitcoin (BTC) is consolidating following a new higher low, a trend that analysts believe is a positive factor for the next direction the market is set to take. Popular crypto strategist Michael van de Poppe observed that BTC has held the level at $110,000 and may be preparing to make another attempt to overcome resistance.
Bitcoin price is trading around $111,000 at the time of writing, and its Relative Strength Index (RSI) is 46 in a day.
The RSI indicates that it is a neutral momentum, meaning that the price may consolidate further or there is an opportunity for a breakout.
The Notable Support and Resistance Levels
The support area of Bitcoin is well established around the level of 110,000, and at this point, the market is expected to stabilize. Van de Poppe stressed that the actual test will occur at the nearest resistance level, which is $112,300.
An effective breakout beyond this resistance may cause a new wave of bullish behavior, and it may mark the beginning of a more robust bull rally.
Nevertheless, traders closely monitor the ability of BTC to maintain the same range and then make another move up.
Bitcoin Volume Trends Point to Cooling Activity
The volumes in trading have slightly relaxed over the past few days. Statistics indicate that the present volumes are at $2.06 million as opposed to the previous three days when the market experienced a low level of activity at 2.45 million, which signifies low activity in the market at the consolidation stage.
Reduced volumes can also be a sign of hesitation amongst traders, many pending a clearer signal of turning in or out of position.
Analysts feel that an increase in volume along with a break above 112,300 would be a testament to the increased bullish tone.
Dip-Buying Opportunities and Market Forecast
Investors looking to buy in accumulation zones, Van de Poppe marked out $102,000–103,000 as a good dip-buy zone in the event the market experiences a follow-up pullback.
While Bitcoin is currently well above these levels, recent crypto market volatility does not rule out the possibility of testing them.
Altogether, the fact that BTC could create a higher low is considered a positive development in the continuation of the longer-term bullish pattern.
Analysts believe that the ability to trade above $110,000 creates a strong foundation for future upward movements in case of any resistance levels.
Both technical signals and investor sentiment are showing similarity; thus, the coming several trading sessions will be of paramount importance in deciding whether Bitcoin will remain in consolidation or launch another bull run.
