Bitcoin (BTC) has shown impressive gains, marking its strongest weekly performance in over two months with a rise of 4.24% and reaching an intra-day peak of $88,804. This surge has allowed BTC to regain a bullish position on the charts, closing above the crucial 200-day exponential moving average (EMA) on the daily chart.
### BTC Could Approach $90,000
With a weekly closing price above $84,600, there is an increasing probability that Bitcoin will attempt to reach the $90,000 mark. However, for BTC to make a sustained advance into this range, it must first navigate and surpass the descending resistance level that currently stands in its way.
### Bitcoin’s Correction Viewed as a Positive Development
Axel Adler Jr., a Bitcoin researcher, has indicated that the current price cycle reflects a healthy consolidation rather than signaling the onset of a bear market. Adler Jr. pointed out that Bitcoin has not yet entered the “overheated” phase of this cycle, as suggested by the Bitcoin Investor Price Model. This model has previously indicated sell signals twice in 2021 and takes into account various metrics including the realized cap, thermo cap, investor price, and Bitcoin’s supply. By analyzing Bitcoin’s cumulative value days destroyed (CVDD), Adler concluded that the market remains in a “growth stage.”
### Understanding Bitcoin’s Cumulative Value Days
The CVDD metric tracks the selling behavior of long-term holders. During the current bull cycle, which spans 2024-2025, a sell signal was triggered only once, in March 2024. In a recent article on Substack, Adler noted, “Given the current market dynamics, we may see experienced investors taking profits when Bitcoin hits significant peak levels ($123K), which could place downward pressure on the price.” Based on his analysis, Adler Jr. anticipates that Bitcoin could rise to $130,000 within the next three months.
### Surge in Bitcoin Open Interest
Recent data from Velo has revealed that Bitcoin’s open interest (OI), which measures the total value of outstanding futures contracts, surged by more than $1.5 billion within a single day. Meanwhile, the funding rate, which indicates the expense associated with holding leveraged positions, remained neutral, suggesting a balance between bullish and bearish traders in the market.
### Weekend Trading Dynamics
On March 23rd, Bitcoin exhibited a significant upward trend, a phenomenon often seen over weekends when trading volumes are typically lower as larger market players refrain from trading until the week resumes. Under these conditions, leveraged trades can significantly impact price movements. An anonymous crypto analyst, IT Tech PL, highlighted the increase in OI following Bitcoin’s rise above $87,500, but cautioned that a combination of high OI and rapid price increases poses a risk for potential liquidation cascades.
### Technical Analysis of Bitcoin’s Price Movement
From a technical standpoint, Bitcoin reached a new high of $88,750, surpassing the previous week’s peak. However, the price has tested the upper Bollinger Band in conjunction with the descending resistance. Additionally, BTC is currently fluctuating within an ascending channel. Considering these factors, a short-term correction may be likely, bringing the price back to the demand zone between $86,000 and $87,000 before a potential breakthrough of the $90,000 resistance.
This article does not provide investment advice or recommendations. All investment and trading activities carry risks, and readers are encouraged to conduct their own research before making decisions.
