Bitcoin Retests Broken Channel | Bounce to $110k?Bitcoin is currently retesting the broken downward channel. This selloff was a market shock reaction due to Israel's airstrikes on Iran. Price found support around $103k, at the daily timeframe 50SMA. The daily 50SMA also served as support in the previous drop to $100k last week.
In the chart's red circle is likely where many long leveraged positions had their stop losses or liquidation levels. We can safely assume this event was a liquidity hunt as Bitcoin remains strong above $100k. A healthy pullback to retest.
Historically, we have seen similar market shock selloffs like this. One example is the 1st of October 2024 Iran strikes on Israel. Bitcoin crashed 5% from $63k to $60k. What followed after was a recovery to over $100k, never seeing $60k again.
Will Bitcoin recover?
We still have multiple bullish developments. Institutions are becoming increasingly interested in Bitcoin, the US Bitcoin reserve, SEC x Ripple case settlement, SOL ETF approval, Fed rate cuts, among others.
Provided that the conflict does not escalate, once the market panic reaction is over, we can expect a healthy bullish continuation, as long as Bitcoin remains above $100k.
We also have a massive pool of short liquidity above $111k. Once we break above this level it will be a short-squeeze to $120k.
