Bitcoin weekly close must hit this $108K+ level to rescue key ‘demand area’

Bitcoin at a Crossroads as Crucial Weekly Close Looms

The cryptocurrency market is on edge as Bitcoin approaches its weekly candle close, a pivotal moment that could set the tone for the days and weeks ahead. After a turbulent week that saw prices dip sharply, all eyes are on one critical price level. According to market analysis, for Bitcoin to maintain its bullish structure, the Bitcoin weekly close must hit this <$108K+ level to rescue key ‘demand area’>, a historical support zone that has previously propped up the price.

The tension is palpable, with recent volatility triggering over $200 million in liquidations across the market in just 24 hours. Let’s break down what’s happening and why this specific price target is so important.

The High-Stakes Battle for the Weekly Demand Area

In technical analysis, a “demand area” or support zone is a price range where a concentration of buying interest is historically found. For Bitcoin, the zone around $108,381 has proven to be a critical battleground. While the price has recently wicked below this level, causing alarm, a strong close above it on the weekly chart would invalidate those fears and confirm that buyers are still in control.

Analysts emphasize that securing a positive weekly close above this threshold is essential to preserve the market’s bullish momentum. It would signal that the recent dip was merely a temporary deviation and that the underlying uptrend remains intact. Failure to reclaim this level could open the door to further downside pressure.

Volatility Spikes Amid Thin Order Books and Mass Liquidations

The recent price action has been anything but calm. After a difficult end to the traditional finance trading week, Bitcoin plunged below the $104,000 mark, shaking investor confidence. This move was exacerbated by what traders describe as “thin order books.”

Here’s what that means:

• Thin Order Books: Following a massive market flush, there are fewer buy and sell orders sitting on exchanges. This lack of liquidity means that even relatively small trades can cause significant price swings, leading to heightened volatility.
• Mass Liquidations: The sharp price drop triggered a cascade of liquidations, with data from monitoring resources showing over $200 million in leveraged positions being forcibly closed in a 24-hour period. This forced selling adds intense pressure to the market, pushing prices down even further.

Prominent market commentators suggest this volatile environment is likely to persist as the market struggles to find its footing after the recent deleveraging event.

The Altcoin Problem: Why Market Sentiment Remains Gloomy

Despite Bitcoin holding a price well above $100,000, the overall mood in the crypto space feels tired and bearish. The reason for this disconnect lies in the performance of the broader altcoin market.

One compelling chart circulating among analysts perfectly illustrates this issue. It tracks the performance of the top 50 altcoin futures on Binance since the bottom of the last bear market, which was triggered by the infamous collapse of the FTX exchange in late 2022. The data shows that many altcoins have failed to deliver the explosive returns investors have hoped for, with many still lagging significantly. This underperformance has soured sentiment for a large portion of market participants who are diversified beyond Bitcoin.

This explains why even as Bitcoin shows signs of resilience, the broader market sentiment, as measured by the Crypto Fear & Greed Index, remains low. While the index has climbed out of “extreme fear” from its recent six-month lows, it currently sits at 29/100, firmly in the “Fear” zone. This indicates that while the panic has subsided slightly, caution and anxiety still dominate the market.

What to Watch for Next

As the clock ticks down to the weekly close, the crypto market finds itself at a critical juncture. Bitcoin’s ability to reclaim and hold the $108,400 level will be the key indicator for the week ahead.

Traders and investors should prepare for continued volatility as the market digests the recent liquidations and navigates the thin liquidity. Whether Bitcoin can defend its crucial demand zone will likely determine if the market is poised for a recovery or another leg down.