The Battle for $86.8k: Can Bitcoin Break Through or Will Bears Take Control?

Key Points

• Bitcoin’s 1-day structure is bearish but there’s a possibility of a price bounce toward $88k.
• Despite trading above $82k support level, Bitcoin’s outlook is not bullish on the 1-day timeframe.

Despite the current bearish structure of Bitcoin (BTC) , there are indications of a potential price bounce toward the $88k mark.

Over the past week, Bitcoin has managed to trade above the $82k support level. However, this has not resulted in a bullish outlook on the 1-day timeframe.

Potential for a Price Bounce

Lower timeframes suggest a possible bounce, provided the $86.8k resistance is breached. The Fibonacci retracement levels from the August-December rally indicate that the $72k support level could be the next target. However, on-chain metrics do not support this pessimistic outlook.

Long-term holders seem to prefer holding onto their Bitcoin rather than selling, which suggests some hope for recovery.

Examining Bitcoin’s Downward Trend

The daily chart for Bitcoin retains its bearish structure. The OBV has also been in a downtrend since February, indicating that selling pressure remains dominant. This suggests the possibility of further losses.

After falling below a 3-month-old range in early March, Bitcoin appears to have formed a new range. The mid-range level at $86.9k has been tested as both support and resistance in the past three weeks.

The OBV has been making higher lows over the past ten days, but this is not indicative of strong buying. Nor is it enough demand to counteract the selling pressure from February.

The 2-week liquidation heatmap shows that the closest liquidity cluster is at $88k. Traders must therefore be prepared for the Bitcoin price to gravitate toward $88k before facing a bearish rejection.

Technical analysis suggests that if $86.8k were flipped to support, it might be safe to go long. However, the liquidation heatmap suggests that might not be true. Caution is advised, especially for the bulls.

Traders should carefully monitor the reaction at both resistances. A rejection could present an opportunity to short-sell the asset.