Bitcoin Has Made a New High Every Time It Hits This Key Support – $140K Ahead?

Bitcoin (BTC) has dropped below $100,000 for a second time this week. Although the market is panicking over this unexpected drop, history shows that the top crypto could be about to make a strong comeback.

Before this week, the last time that BTC hit $100K was in June. Back then, market conditions were starting to improve, and that move set the stage for a big rally toward a new all-time high.

Crypto liquidations have surged above $3.6 billion since the month started, as comments from the head of the Federal Reserve, Jerome Powell, depressed market sentiment even further.

The October 10 flash crash paved the way for the latest downturn that the crypto market has been experiencing, and Powell hit the last few nails to put bulls to sleep for a bit.

Bitcoin ETFs Break Negative Streak of Outflows

The Fear and Greed Index reflects that investors panicked over this recent drop, as this key gauge dropped from a 30-day peak of 62 to 21 at the time of writing.

Interestingly, Bitcoin-linked exchange-traded funds (ETFs) booked their first day of positive net inflows yesterday after a six-day streak of net withdrawals that exceeded $1.9 billion.

Meanwhile, traders’ participation has been improving after a big decline in open interest (OI) in the futures market.

Data from CoinGlass shows that futures positions in BTC have been climbing to higher levels 5 days in a row, showcasing that traders are coming back to the market.

There could be two reasons for this. Either buyers are positioning for a recovery, or short sellers are convinced that BTC will keep dropping.

The weekly chart shows historical evidence that BTC could have hit a local bottom. If that’s the case, any of those two scenarios would be positive for the top crypto’s short-term outlook.

A higher volume of long positions in the futures market will prompt market makers to buy the underlying asset to hedge their exposure. Moreover, if short-sellers get squeezed by a recovery, that would increase the magnitude of any upward price swings for BTC.

BTC Hits Key EMA Support and Could Jump to $140K

Looking at this higher time frame, BTC has tagged the 50-week exponential moving average (EMA). This line has acted as a strong area of demand four times in the past 29 months.

The higher the time frame, the more relevant these technical indicators are.

What is perhaps more interesting is that every single time BTC has bounced off this level, it has made a higher high two to eight weeks after. Hence, the odds favor a bullish outlook for BTC that could end up pushing the token to a new all-time high soon.

The strongest rally of these four occurred when the Relative Strength Index (RSI) surged above the 14-period moving average. Hence, that could be the most optimal entry as it would confirm that the top crypto is about to hit another home run.

The most likely bullish target if that scenario unfolds would be the $140,000 mark, meaning a 40% upside potential in the near term. The implications of such a recovery for altcoins would be huge.

This means that BTC could end the year on a positive note. One potential catalyst for that would be the end of the U.S. government shutdown, as that would once again open the floodgates for regulatory approvals for all kinds of ETFs and blockchain-based solutions.