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The cryptocurrency market experienced a sharp sell-off on Monday, leading to a significant rebound for Bitcoin (BTC) 
$109,894, which climbed to $102,500, marking a 12.35% recovery. However, this upturn was short-lived as the leading cryptocurrency reversed direction and fell back below $100,000. Market data indicates a potential new upward trend as funding rates have turned negative, prompting experts to analyze how Bitcoin will test crucial levels based on technical indicators.
Will Bitcoin Rise Again?
Funding rates are critical indicators reflecting the balance between long and short positions in the futures market. A negative funding rate signals that short sellers are dominant. Historically, such a situation can lead to rapid price increases for Bitcoin. For instance, after a 23% drop in January, the shift to a negative funding rate propelled BTC to $108,300.
Currently, the funding rate presents a similar scenario. Following an $8 billion liquidation on Monday, Bitcoin managed to hold the $97,200 support level. The strength of this level has raised hopes for the continuation of an upward trend. However, the $101,400 to $105,500 range should be monitored closely as the next resistance zone in the coming days.
Key Levels Ahead for Bitcoin
Should Bitcoin breach the $110,000 mark, the new target will be $123,000, corresponding to the Fibonacci 161.8% expansion level from January’s ascent. Conversely, losing the $97,200 support could lead to a drop towards the $92,500 to $85,800 range.
Market participants may consider potential dip purchases at these levels, particularly since the $89,000 level has historically served as strong support. Experts emphasize that while Bitcoin will likely maintain short-term volatility, the overall outlook suggests that the upward trend remains intact.
