TLDR
- Bitcoin price rallied to $113,900 after testing weekly lows near $111,000 on Wednesday
- Bullish RSI divergence patterns emerged on hourly and four-hour charts signaling potential reversal
- Whale holders dumped 147,000 BTC worth $16.5 billion since August all-time highs
- Bitcoin implied volatility hits lowest levels since October 2023 before previous 325% rally
- Market liquidations totaled $1.5 billion on Monday in largest sell-off since March
Bitcoin price staged a sharp recovery to $113,900 on Wednesday following a test of weekly support levels near $111,000. The bounce occurred during Asian trading hours and represents the cryptocurrency’s attempt to reverse bearish momentum that dominated early week trading.
The recovery comes after a challenging start to the week when Bitcoin experienced nearly 3% losses on Monday. Roughly $1.5 billion worth of cryptocurrency positions were liquidated in a single trading session, marking the largest forced selling event since March.
Technical analysis reveals several bullish signals supporting the Wednesday price recovery. Relative Strength Index (RSI) divergences appeared on both one-hour and four-hour timeframes, with price forming lower lows while RSI created higher lows.
This divergence pattern typically indicates weakening bearish momentum and potential for trend reversal. The recovery also coincided with Bitcoin retesting its daily order block, providing technical support for a potential push toward $115,000.
Market Structure Shows Mixed Signals
Bitcoin price action must overcome key resistance levels to confirm the bullish reversal. Traders are monitoring a potential four-hour candle close above $113,400 as confirmation of structural change from bearish to bullish.
Reclaiming the 200-period exponential moving average on four-hour charts would provide additional confirmation of upward momentum. MN Capital founder Michaël van de Poppe noted the strength of the rebound after the successful sweep of weekly lows.
However, some analysts remain cautious about sustainability. Crypto trader Crypto Chase warned that Bitcoin must reclaim the $113,400 to $114,000 range with conviction or risk another decline toward $107,000 support levels.
On-chain data reveals diverging signals from different market participants. Large whale holders controlling 1,000 BTC or more have sold approximately 147,000 Bitcoin since the August all-time high above $124,500.
This distribution represents $16.5 billion worth of Bitcoin and shows a 2.7% reduction in whale holdings. The sustained selling pressure from large investors presents a headwind for sustained price recovery.
Bitcoin Price Prediction
Despite whale selling pressure, several indicators suggest Bitcoin price may be positioning for a larger move. Implied volatility has dropped to its lowest levels since October 2023, a period that preceded a 325% rally from $29,000 to $124,000.
XWIN Research described the current setup as potentially representing the “quiet before the storm,” where low volatility environments often precede explosive price movements.
Exchange reserves remain at multi-year lows according to CryptoQuant data, leaving fewer coins available for immediate selling pressure. Bitcoin’s Market Value to Realized Value ratio sits near neutral territory, suggesting limited pressure for panic selling or aggressive profit-taking.
The combination of technical reversal signals, record-low volatility, and tight exchange supply could support further Bitcoin price recovery if bulls can maintain momentum above current resistance levels.
