From late September, Bitcoin has embarked on an impressive bullish rally to reach price levels around its all-time high of $124,457. However, it remains speculative as to whether the premier cryptocurrency will maintain this early October momentum to put in a new all-time-high price, or experience a major correction into deeper liquidity zones.
Bitcoin Key Levels To Watch: Rally’s Challenge Lies At $125k Resistance
In an X post on October 3, key opinion leader (KOL) Ted Pillows shared that Bitcoin is once again approaching critical price levels, backed by data showing trader activity. Pillows based this analysis on the Order Book Heatmap metric, which shows the amount or quantity of pending buy and sell orders at specific price levels on different exchanges. The indicator shows horizontal coloured bands at those price levels, with the colors representing clusters of orders resting around those zones.
According to the KOL, Bitcoin has a high amount of sell orders packed around the $125,000 price level. Usually, a zone such as this with clusters of sell orders could act as strong resistance for the price. Interestingly, Ted also cited the presence of a significant amount of buy orders to the downside of the price, specifically around $119,500 and $117,500. As is intuitively obvious, these orders could act as solid support if the flagship cryptocurrency were to experience a correction to this level.
Cautionary Market Outlook For Bitcoin
In a separate X post, Pillows also shares more insights concerning Bitcoin’s price action and what to watch out for in a potential downswing. Notably, the analyst expected Bitcoin to see an accumulation around the $120,000 price level before surging to around $124,000, a prediction that has since played out, leading to a minor retracement.
In analyzing the important immediate support levels, the crypto pundit highlighted the 20-day Exponential Moving Average (EMA20), which is currently near $118,447 as a vital threshold. According to Pillows, if Bitcoin holds above this level, the broader trend (which is currently bullish) will most likely be retained.
On the other hand, a break below the 30-day Moving Average (MA30), currently around $116,415, may be ominous for the cryptocurrency. The KOL explained that this situation could open the door to “a larger correction toward $112k-$113k,” as more liquidity will be sought after.
Therefore, the market remains in a state of anticipation to see if Bitcoin tests its higher resistance at $125,000 or slips back into lower zones to test its support zones. If Bitcoin were to break out of its current resistance zone, the market could see the continuation of its already impressive upward rally into previously uncharted territory.
At the time of writing, Bitcoin is valued at about $122,100, with a fair growth of about 1.6% in the past day.