Bitcoin’s Rise from $100,000: A Healthy Pullback or the Beginning of a Deeper Correction?
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On Thursday, Bitcoin (BTC) prices fell below $101,000 as the conflict between US President Donald Trump and the world’s richest man, Elon Musk, rattled the US financial markets. In the last 48 hours, however, the leading cryptocurrency rebounded, climbing above $105,000 before settling into a range-bound movement. Amid these events, a well-known crypto analyst known as KillaXBT has outlined various scenarios for Bitcoin’s forthcoming price action.
Understanding Bitcoin’s Bounce Back From $100,000
In an X post on June 7, KillaXBT offers an in-depth technical analysis of the Bitcoin market, discussing the recent price recovery and potential future movements. After hitting a new all-time high of nearly $112,000 on May 22, BTC entered a correction phase, dropping approximately 10% into the $100,000 range before its recent rebound over the last two days.
KillaXBT asserts that this rebound was not coincidental; it was influenced by a combination of technical indicators and market conditions. These elements include daily FVG and volume imbalances, which are price inefficiencies left on the chart.
Additionally, there was a liquidity sweep as Bitcoin’s gradual decline dropped prices below the previous weekly lows, triggering numerous stop-losses on long positions. This event created a wave of liquidity that big players exploited to facilitate a market rebound.
KillaXBT also discusses a short squeeze setup, noting that the Bitcoin market became heavily shorted when traders anticipated further declines following the initial bounce from $100,000. As prices started to rise, these short sellers were forced to buy back to minimize their losses, further fueling the rally.
What’s Next For BTC?
Looking ahead, KillaXBT has identified three possible scenarios for BTC. Currently, the analysts indicate that the leading cryptocurrency is retesting a resistance zone between $104,800-$106,000, which corresponds to the 0.5-0.618 Fibonacci retracement levels of the recent decline.
In the first scenario, KillaXBT predicts a bullish continuation if Bitcoin can break and sustain trading above this resistance zone. Such a movement could trap short sellers once again, possibly triggering further upward momentum.
Conversely, if Bitcoin gets rejected at this resistance level, the second scenario suggests a decline, retesting the $100,000 support area. The worst-case scenario includes a price drop below $100,000, where Bitcoin would seek support around the $97,000 region.
Interestingly, KillaXBT’s personal forecast anticipates that market makers will continue pushing Bitcoin’s price higher, capitalizing on the recent sharp rebound that caught many short traders off guard. Without a clear “safe” long entry available, the analyst posits that further price increases would trap more short positions and compel sidelined bulls to pursue the rally.
As of now, BTC is trading at $105,600, reflecting a 1.16% gain in the last day.
BTC trading at $105,566 on the daily chart | Source: BTCUSDT chart on Tradingview.com
Featured image from iStock, chart from Tradingview
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