Bitcoin’s price continues to surge, with many analysts eyeing the level of $95,000 as a critical resistance to overcome.
Bitcoin’s Next Big Resistance: $95K— What Will Trigger the Breakout?
As Bitcoin’s price continues to surge, many analysts are left wondering what will trigger the next big breakout. With the asset’s latest rally, many are eyeing the level of $95,000 as a critical resistance to overcome. But what’s driving this optimism, and what does it mean for the future of Bitcoin?
One factor supporting the bullish argument is the resurgence of institutional buying, reflected by significant inflows into spot Bitcoin exchange-traded funds (ETFs). On April 22 and April 23, spot Bitcoin ETFs saw a net flow totaling $936 million and $917 million, respectively, according to data from SoSoValue. This trend reflects growing confidence among traditional finance players, as observed by market analysts like Jamie Coutts, who noted that global liquidity is hitting new all-time highs, historically fueling asset price rallies.
Less BTC Supply on Crypto Exchanges
Another bullish sign is the decreasing trend of Bitcoin exchange inflows, suggesting a potential reduction in sell pressure. The total amount of coins transferred to exchanges has dropped from a year-to-date high of 97,940 BTC per day on Feb. 25 to 45,000 BTC on April 23, according to data from CryptoQuant. This is reinforced by a reduction in the number of addresses depositing Bitcoin to exchanges, which has been steadily declining since 2022.
Negative Funding Rates Can Fuel BTC Rally
Bitcoin’s perpetual futures funding rates have remained negative since April 22, despite the price rising by 11% over the same period, data from Glassnode shows. Negative funding rates imply that shorts are paying longs, reflecting a bearish sentiment that can fuel a short squeeze as prices rise.
BTC Trades Above the 200-Day SMA
On April 22, Bitcoin’s price rose above a key level: the 200-day simple moving average (SMA) currently at $88,690, fueling a market-wide recovery. The last time the BTC price broke above the 200-day SMA, it experienced a parabolic move, rallying 80% from $66,000 on Oct. 14, 2024, to its previous all-time high of $108,000 on Dec. 17.
What’s Driving the Optimism?
So, what’s driving the optimism surrounding Bitcoin’s next big breakout? In our view, it’s the combination of factors mentioned above, including: Institutional buying: Growing confidence among traditional finance players is driving institutional buying, which is creating sustained upward pressure on Bitcoin’s price. Less BTC supply on crypto exchanges: A reduction in exchange inflows and addresses depositing Bitcoin to exchanges suggests a potential reduction in sell pressure. Negative funding rates: The bearish sentiment reflected in negative funding rates can fuel a short squeeze as prices rise. BTC’s trading above the 200-day SMA: The asset’s latest rally has broken above a key resistance level, paving the way for further gains.
What’s Next?
If history repeats itself, Bitcoin may rally from the current levels, breaking above the resistance at $95,000 towards $100,000. For the bulls, the resistance levels at $95,000 and $100,000 are the primary ones to watch. Rising above that would pave the way for a run toward the Jan. 20 all-time high above $109,000.
