Key Points
- Bitcoin’s price soars above $100,000, marking a significant milestone in its history.
- However, a bearish divergence is forming, suggesting potential sell pressure and profit-taking.
Bitcoin [BTC] has achieved a major milestone, with its price soaring above $100,000 for the first time ever. The question now is – what’s next for this leading cryptocurrency?
Bitcoin’s Impressive Rally
December has been a bullish month for Bitcoin, as the cryptocurrency’s price action reached a high of $103,620 in the last 24 hours. The price action may provide clues regarding its next move.
Despite Bitcoin hitting higher highs, its RSI has been forming lower highs. This is leading to the formation of a bearish divergence, suggesting that a wave of sell pressure may be imminent.
No Signs of Bitcoin Bears Yet
There’s a significant possibility that Bitcoin could remain above the $100,000 price level and potentially extend its upside in the coming days. However, a pullback is inevitable, particularly as sell pressure begins to build up. This may already be happening, as indicated by BTC exchange flows.
CryptoQuant has revealed that exchange flows have significantly dipped in the last 24 hours, suggesting a slowdown in momentum. Additionally, exchange inflows peaked at 28,466 BTC on 5th December, compared to 27,945 BTC in exchange outflows.
Higher exchange inflows than outflows could signal an increase in sell pressure. Yet, Bitcoin continued to extend its upside, which could be explained by on-chain data.
The derivatives segment’s demand remained strong, as indicated by the surge in open interest. This reached a new all-time high of $65.23 billion at the time of writing. Bitcoin funding rates also remained positive, hitting a new 2-week high, reflecting strong bullish demand. This confirms that derivatives demand significantly contributed to BTC’s push above $100,000.
Despite Bitcoin’s historic rally, it’s important to note that a bearish divergence is forming. Holiday consumer behavior may also influence many holders to take some profits off the table.
A large number of Bitcoin holders, especially those who bought at significantly lower prices, might be motivated to take profits. This could possibly trigger a sizable retracement from BTC’s current price level.