Key Takeaways

Bitcoin has broken through the psychological $50,000 resistance level.
Further buying pressure could see it rise towards $55,000.
The $49,200 support level could absorb any spike in profit-taking.

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Bitcoin is back above $50,000 for the first time in 100 days, and on-chain data suggests it has more room to run.

Bitcoin Targets Higher Highs

Bitcoin has kicked off the week with a bang as its price moved past the psychological $50,000 resistance level. The sudden upswing saw nearly $70 million worth of short positions get liquidated across the board. Now that doubters have been shaken off, BTC may have what it needs to advance further.  

From a technical perspective, the leading cryptocurrency appears to be contained within an ascending parallel channel. Each time Bitcoin has risen to the channel’s upper or middle boundary since Jul. 20, a rejection has occurred, pushing prices to the lower edge. From this point, it tends to rebound, which is consistent with the characteristic of a channel.

BTC recently reclaimed the channel’s middle trendline as support. If the price action seen over the past month repeats, Bitcoin could rise towards the channel’s upper trendline at around $55,000.

Source: TradingView

IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model reveals no supply barrier can prevent Bitcoin from achieving its upside potential. Based on this on-chain metric, the most significant interest area sits between $54,760 and $56,270. Around this price level, over 780,000 addresses have previously purchased nearly 350,000 BTC.

This area may have the ability to absorb some of the recent buying pressure. Holders who have been underwater may try to break even on their positions, slowing down the uptrend and leading to a correction.

Source: IntoTheBlock

On the other hand, the IOMAP cohorts show that Bitcoin sits on top of stable support. More than 915,000 addresses bought roughly 500,000 BTC between $48,700 and $50,220. Such an important demand barrier indicates that bears will struggle to push prices down. But if they do, there is another important interest zone at $46,360 that might keep falling prices at bay. 

This news was brought to you by Phemex, our preferred Derivatives Partner.

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