Technical indicators are hinting at the possibility of a stability period prior to the next period of growth, and Bitcoin has struggled to overcome the $120,000 resistance level, and it’s showing short-term exhaustion.
As seen on the gigantic upper wick of the day candle, the price of Bitcoin tried to continue its upward momentum on Wednesday but was strongly forced to sell on the $120,000 wall.
Despite this, bulls continue to hold their positions, which also suggests confidence in a potential continuation of the rally.
As of today, Bitcoin is trading at around $119,801. According to data from Farside Investors, U.S.-based Bitcoin exchange-traded funds (ETFs) saw $799.4 million in inflows on Wednesday, marking the tenth straight day of net inflows.
Over $5.2 billion has flowed into Bitcoin ETFs since July 2, and it reflected strong institutional buying and investor trust in the long-term direction of the asset.
Technical analysis suggests that repeated failure to decisively cross $120,000 might lead to a pullback to the 20-day exponential moving average level of about $113,528.
A bounce there can resume bullish momentum and push BTC over the $120,000 to $123,218 resistance zone.
If this breakout takes place, analysts are predicting a jump to $135,729, with the potential to trend up to the long-term level of $150,000.
On the downside, a drop below $110,530 could turn the short-term trend in favor of the bears, which can push the price to $105,000.
The 20-day EMA has started leveling off, and the relative strength index (RSI) on the 4-hour chart from Trading View, just above the middle level, suggests a range-bound setup could be formed between $115,000 and $123,218.
Analysts believe the key level to watch is $120,064. A pullback and close above that level would be the first indication of new strength and could potentially precipitate a retest of Bitcoin’s all-time high around $123,218.
In the interim, Bitcoin appears to be due for a short-term consolidation phase as investors await stronger proof of the next direction.
