Bitcoin’s Strongest Trading Day Since May Signals Potential Rally to $107K

Bitcoin’s strongest trading day since May cues possible rally to $107K

Summary:
Bitcoin experienced its most significant daily price increase since May, marked by the formation of a bullish engulfing candle. Experts believe this could lead to a rally towards $107,000, contingent on Bitcoin closing above the crucial $96,000 level.

Key Takeaways:

Bitcoin witnessed a bullish engulfing candle, indicating its strongest daily gain since May and the potential for a trend expansion.
For full bullish confirmation, a daily closing price above $96,000 is necessary.
Buy-side trading activity reached its peak of the entire bull market, with the Coinbase Premium turning positive.

An Improving Bitcoin Structure Awaits Confirmation Above $96,000

On Tuesday, Bitcoin's rally resulted in a distinct pattern of higher highs and higher lows, following a liquidity sweep below $84,000 on Monday. This pattern suggests that seller momentum is waning. The breakout was accompanied by strong trading volume, indicating solid demand rather than a mere response to stop-loss orders.

Breakouts supported by high volume usually yield clearer continuation, as they demonstrate active participation from buyers rather than just market makers.

Bitcoin four-hour chart. Source: Cointelegraph/TradingView

Currently, a bullish break of structure (BOS) is developing above the $92,300 level. A confirmed BOS would decisively shift the short-term trend upward, even if Bitcoin temporarily retraces into the fair value gap (FVG) between $90,000 and $88,000.

However, the daily chart requires a Bitcoin close above $96,000 for full confidence. This level is pivotal as it represents a break in structure on a higher time frame. Successfully surpassing this level would indicate a comprehensive trend shift rather than just a temporary bounce.

Once Bitcoin reclaims the $96,000 mark on a daily closing basis, the immediate target zone extends towards $102,000–$107,000, where a significant amount of external liquidity exists. This area includes prior swing highs, unspent stop-loss pockets, and liquidity from breakout traders positioned above previous resistance levels.

From a market structure perspective, these zones can act like magnets. A decisive breakout that surpasses the barrier represented by the $96,000 level could set the stage for further upward movement.

Related: Bitcoin Adds $732B in New Capital This Cycle as Market Structure Transforms

Increased Buy-Side Flow and Positive Premium Indicate Recovery

Data from CryptoQuant shows that the market buy-to-sell ratio surged to 1.17, marking the highest level since the current market cycle began in January 2023. Such a strong buy-side presence typically signals the onset of expansion phases as structural flows gain momentum.

Bitcoin Taker Buy Sell ratio. Source: CryptoQuant

At the same time, the Coinbase Premium Index moved to a positive value of +0.03 after prolonged selling pressure in the US market. Historically, positive premium readings indicate an uptick in institutional investor demand. Additionally, trading volumes on Binance, both spot and perpetual, are increasing, and the price gap between Binance and Coinbase is narrowing, pointing to healthier global liquidity.

Related: Bitcoin Bollinger Bands Repeat ‘Parabolic’ Bull Signal from Late 2023