Bitcoin has skyrocketed to the back of the short slants of textbooks, but now we find ourselves in a critical zone of resistance. Will it break or roll over?
The recent price action of Bitcoin (BTC) has been caught by many surprises and has created a strong bounce from highly sold conditions. This rebound appears to be driven primarily by a short aperture. This is a phenomenon in which excessively bearish feelings lead to rapid price increases as short positions are settled. But now, BTC is trading in technically sensitive areas where it can determine if this bounce has more legs or if a reversal is imminent.
Important technical points
- Resistance zone: $98,300 level, 0.618 Fibonacci, and downward channel resistance.
- Volume Profile: Price challenges the point of control.
- Trend Context: The movement of current driven by a short aperture without actual rejection – yet.
BTCUSDT (4H) Chart Source: TradingView
The rally began when bearish sentiment was approaching its peak, and as many traders approached the recent lows, they significantly reduced BTC. This overcrowded positioning caused a chain reaction as the price began to bounce back, forcing the short position to cover and fueled the exaggerated upward movement. This type of short squeeze is often not sustainable unless it comes with actual demand and fresh spot volumes.
Currently, Bitcoin is testing several important resistance levels in one cluster. Most important of these include the $98,300 level, a descending trendline that defines recent price actions, and a retracement of 0.618 Fibonacci from previous swing highs.
This confluence zone is also consistent with daily imbalance regions and control points, making it a high-risk position for potential inversions.
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A clean rejection here confirms this gathering simply as the top of a short squeeze, opening a door below another leg. However, once Bitcoin integrates around this resistance zone and breaks over it with a sustained volume, the structure could transition to a genuine bullish continuation.
In addition to concerns, the rally occurred during periods of thin liquidity and limited spot market interest. Without the actual demand behind the movement, the sustainability of higher prices remains questionable. Smart money often fades these types of meetings unless confirmed with follow-through volume and clear support recall.
What to expect from future price action
All eyes should remain at the $98,300 level. It is clearly recovered above this zone, closing to support resistance, suggesting that the Bulls are in control. Until then, traders need to be cautious as failures here could potentially bring Bitcoin back to a lower level of support. Expect volatility and beware of confirmed rejections or breakouts.
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