Key takeaways:
Bitcoin bounced to $113,900 after testing weekly lows, fueled by bullish divergences.
Whale-sized entities have sold 147,000 BTC since August, signaling supply pressure.
Bitcoin options implied volatility hit multi-year lows, hinting at a potential explosive move.
Bitcoin (BTC) staged a swift recovery to $113,900 on Wednesday after sweeping below Monday’s low of $111,500 and briefly testing the $111,000 mark on Binance during the Asia trading session. The bounce signaled an early attempt at mid-week recovery, supported by emerging bullish signals on the charts.
One of the key drivers behind the rebound is the bullish divergence between the relative strength index (RSI) and the BTC price on the one-hour and four-hour charts. A bullish divergence occurs when the price registers lower lows while the RSI forms higher lows, often indicating a waning bearish momentum and potential for a reversal.
The recovery also coincided with Bitcoin retesting its daily order block, providing a technical base for a possible push toward $115,000. Still, stronger confirmation is needed.
A four-hour candle close above $113,400 would signal a clear shift from bearish to bullish structure. Additionally, reclaiming the 200-period exponential moving average (EMA) on the four-hour chart would reinforce positive momentum.
Crypto traders offered mixed reactions to the move. MN Capital founder Michaël van de Poppe noted the strength of the rebound, stating,
“Good sweep of the lows for Bitcoin and it holds up. Breaking the 4H 20 EMA would be great for upwards momentum. Strong bounce.”
Crypto trader Crypto Chase cautioned that Bitcoin must reclaim the $113,400 to $114,000 range with conviction, or else the recent gains could unravel, sending BTC back toward $107,000.
Related: Bitcoin Bollinger Bands tighter than ever as trader eyes $107K ‘max pain’
Big Bitcoin holders trim positions as implied volatility hits a two-year low
While Bitcoin’s short-term recovery is gaining traction, broader onchain trends reveal diverging signals. Earlier, Coinpectra reported that whale entities holding 1,000 BTC or more have sold off roughly 147,000 BTC, worth $16.5 billion, since Bitcoin’s all-time high above $124,500 in August.
The 2.7% reduction in holdings highlighted sustained selling pressure from large investors, often interpreted as a headwind for price recovery.
Yet, other market indicators suggest the broader environment remained unusually quiet rather than decisively bearish. XWIN Research pointed out that Bitcoin’s implied volatility has dropped to its lowest levels since October 2023, a period that preceded a 325% rally from $29,000 to $124,000 for BTC.
The analysis described the current setup as a potential “quiet before the storm,” where low volatility and muted trader positioning may be storing momentum for a decisive move.
Supporting this view, CryptoQuant data underscored exchange reserves hovering at multi-year lows, leaving fewer coins available for selling. Meanwhile, Bitcoin’s Market Value to Realized Value (MVRV) ratio sits near the neutral zone, implying limited pressure for either panic-selling or aggressive profit-taking.
Together, these factors painted a market caught between whale-driven distribution and a structural backdrop of tightening supply.
Related: Bitcoin bull cycle enters ‘late phase’ as profit-taking metrics spike
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.