Bitcoin’s recent consolidation phase following a significant rally has traders closely watching for a potential breakout to new all-time highs. The cryptocurrency surged to $105,900 from $74,400 but has since hovered below the $104,000 to $105,000 range, a zone many analysts now consider a resistance level. Yet, others see this as a classic bull flag pattern, a continuation structure that could lead to a fresh leg up.
Bull Flag Formation and Its Implications
A bull flag typically forms after a sharp price increase, followed by sideways trading characterized by lower volume. Once the consolidation phase concludes, a breakout through the trendline resistance often signals the resumption of the uptrend. According to data from TRDR.io, Bitcoin’s recent rally was driven by massive liquidations in margin markets and substantial spot volumes, buoyed by billion-dollar BTC ETF inflows and announcements of new Bitcoin treasuries by major corporations.
Profit-Taking and Market Sentiment
Despite Bitcoin’s strong recovery, the current lack of buy volume near the range highs suggests traders are in a profit-taking mode. Glassnode’s short-term holder (STH) profit and loss data supports this view, showing a spike in realized profits but still below the typical levels seen during major bull runs.
Historically, for Bitcoin to continue its ascent, a more substantial profit-taking wave is often necessary to reset the market before a sustained rally.
Key Support Levels to Watch
Analysts are now eyeing the $90,000 to $100,000 zone as critical support. According to Material Indicators, Bitcoin’s liquidity heatmap reveals significant bid support stacking near the $100,000 mark, with asks lowering in anticipation of a potential pullback. Daan Crypto Trades, a prominent market analyst, noted that he remains “cautiously bullish” as long as BTC holds above $90,000 but warned of a possible short-term flush if equity markets falter.
$BTC My view on things.
— Daan Crypto Trades (@DaanCrypto) May 16, 2025
Price saw a sharp move post Tariff drama, outperforming stocks in doing so. Since some of the trade uncertainty got cleared up, stocks kept going while BTC stalled.
The big ATH level sits right above. If price were to go back into price discovery then… pic.twitter.com/ybrIvMXOjb
With Bitcoin’s bull flag pattern still intact and profit-taking pressure yet to reach historical extremes, the stage is set for a potential breakout to new highs. However, traders remain vigilant, watching for signs of a deeper retracement before the next major move.
Also Read: How eToro’s $5 Bitcoin Buy Became a $50M Sale – And Why CEO Yoni Assia Still Regrets It
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
