Bitcoin Price Analysis: BTC Bounces To $85,000 As Markets Recover

The cryptocurrency market rebounded on Friday as risk appetite returned, lifting prices. As a result, Bitcoin (BTC) jumped from $80,000 to $85,113 before marginally declining and moving to its current level. The flagship cryptocurrency is up over 1% in the past 24 hours, trading around $83,827. 

The crypto and traditional markets roared back to life on Friday, with the crypto market cap registering a near 2% increase and moving to $2.74 trillion, while the S&P 500 and Nasdaq indexes rose 1.7% and 2.3%. 

Markets Register Sharp Bounce 

Risk asset bears took a breather on Friday as the crypto market posted considerable gains after a period of muted price actions. BTC briefly climbed above $85,000 before retreating to its current level. The price action marked the return of risk appetite to the markets, with Paul Howard, Senior Director of Crypto Trading Firm Wincent, stating, 

“To see the market bouncing off these recent lows is most likely a combination of the macro news around risk assets (inflation/tariffs) and a sign that a more stable base for cryptocurrencies is coming into place given the drawdowns from the top just a month ago.”

Howard pointed out that $2.6 billion in leveraged crypto derivatives positions were liquidated over the past seven days, leaving the markets on a healthier footing by flushing out excessive leverage. BTC’s bounce briefly took it past the 200-day SMA. However, it is struggling to consolidate above it as sellers look to drive the price back towards $80,000. The 200-day SMA is widely used to gauge long-term trends for an asset and often serves as a support for prices to bounce in a bull market. 

Data from Cryptoquant showed rising exchange reserves, indicating potential selling pressure. Coinglass data showed that as BTC climbed, over $43 million in short positions were wiped out. 

BlackRock Resumes BTC Buying 

Friday saw bullish sentiment return to the crypto market as BTC bounced past $85,000. The markets jumped seemingly out of nothing, indicating a recovery could be on the cards. BlackRock has also resumed buying BTC with the introduction of an IBIT Bitcoin ETF, further fueling positive sentiment. According to Arkham Intelligence, BlackRock received $25 million worth of BTC from Coinbase Prime. After weeks of outflows from IBIT and other Bitcoin ETFs, the fresh injection of BTC is a relief for the market. 

“BLACKROCK IS BUYING BITCOIN. BLACKROCK JUST RECEIVED $25M OF $BTC FROM COINBASE PRIME. THEY NOW HOLD $47.47B OF BITCOIN.”

Most of the market’s recent decline was due to the so-called tariff war. However, tariff news does not seem to be impacting the markets much. This can be gauged from the fact that BTC has repeatedly tested the $80,000 level without breaking lower. 

Bitcoin Could Consolidate For A While: 10x Research 

10x Research has not ruled out Bitcoin repeating its 2024 price action and spending most of the year consolidating after reaching all-time highs early on. According to Markus Thielen, a repeat of a movement similar to 2024 is “very possible.” BRC reached an all-time high of $73,679 in March 2024 before hitting a consolidation phase and trading in a range of $20,000 until Donald Trump’s election victory in November. According to Thielen, Bitcoin’s current chart resembles a “High and Tight Flag,” which despite being a bullish continuation pattern shows signs of weakness. 

“Two flags instead of a single, precise formation weakens this setup. As a result, the pattern currently suggests market indecision rather than a straightforward bullish consolidation.”

He also pointed out that the Bitcoin ETF market lacks the “Buy The Dip” mentality, stating there was little incentive for investors to take advantage of Bitcoin’s recent price dip. 

“This aligns with our view that most ETF flows came from arbitrage-driven hedge funds. Given the persistently low funding rates, there’s little incentive or willingness to deploy additional capital despite the recent price correction.”

Thielen is also unsure Bitcoin’s uptrend would resume in the short term and urged traders to close their short positions. 

Bitcoin (BTC) Price Analysis 

Bitcoin (BTC) moved past the 200-day SMA on Friday, indicating that bullish sentiment is returning. Additionally, the failure of the bears to capitalize on BTC’s fall below the 200-day SMA and $80,000 suggests that selling is drying up at lower levels. However, analysts believe BTC is not out of the woods yet, with one stating the flagship cryptocurrency needs a close above $89,000 to confirm a bottom. According to data from CoinGlass, a move past $89,000 could liquidate $1.6 billion in short positions. However, the analyst believes BTC could dip to the $69,000 and $74,000 range if such a scenario does not pan out. However, buyers have a difficult time ahead, with investors remaining jittery. 

BTC entered the weekend on a bearish note, dropping 3.53% on Friday and settling at $86,781, but not before falling to a low of $84,222. Sellers retained control on Saturday as BTC registered a marginal decline and settled at $86,267. Bearish sentiment intensified on Sunday as BTC plunged below the 200-day SMA and $80,000, falling to a low of $79,987 before reclaiming $80,000 and settling at $80,736. Buyers attempted a recovery on Monday as BTC surged to an intraday high of $84,075. However, it could not stay at this level and dropped to $78,620, a fall of nearly 3%.

Source: TradingView

BTC plunged to an intraday low of $76,642 on Tuesday as selling pressure intensified. It recovered from this level to register an increase of 5.50% to reclaim $80,000 and settle at $82,943. Buyers retained control on Wednesday as BTC rose almost 1% to $83,709. However, it was back in the red on Thursday, dropping over 3% to $81,136. Bullish sentiment returned on Friday as BTC rose nearly 4% to move past the 200-day SMA and reach an intraday high of $85,351 before settling at $84,002. The current session sees BTC marginally up as buyers look to move past and consolidate above $85,000. While sentiment has changed over the past few days, BTC must close above $89,000 to confirm a bottom and the return of bullish sentiment. The MACD has flipped to bullish, indicating BTC could see an uptrend.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.