TLDR
Bitcoin recovered from a weekend dip to $106,600 and is now trading near $110,000
Analysts identify a bullish double bottom pattern with a neckline around $109,000
Long-term holders accumulated $28 billion worth of Bitcoin during recent liquidations
Two major liquidation waves cleared $185 million in over-leveraged long positions
Technical analysts predict Bitcoin could reach $112,000 if current support levels hold
Bitcoin has bounced back from weekend lows and is testing the $110,000 resistance level. The cryptocurrency dropped to $106,600 over the weekend before recovering most of its losses.
Analyst Ibrahim Cosar identified a double bottom formation on Bitcoin’s hourly chart. This pattern shows two lows at similar levels with a peak between them. The first bottom occurred on May 23 at $106,800, followed by a second low on May 25 at $106,600.
The double bottom pattern has a neckline around $109,000. Bitcoin broke above this level with increased trading volume, which analysts view as confirmation of the bullish breakout.
If the $109,000 level holds as support, Bitcoin could target prices above $112,000. Cosar explained that double bottoms signal when selling pressure weakens and buyers regain control.
Fellow analyst Ali Martinez shared similar views, posting charts showing Bitcoin breaking out from its recent downtrend. Martinez sees Bitcoin targeting $110,000 and potentially higher levels.
Market Liquidations Clear Overleveraged Positions
Recent price volatility triggered two major liquidation events on Binance. The first wave occurred when Bitcoin fell below $111,000, wiping out over $97 million in long positions around the $110,900 level.
A second liquidation wave hit when Bitcoin dropped below $109,000. This cleared another $88 million in leveraged long positions. The combined liquidations totaled $185 million and removed speculative traders from the market.
CryptoQuant analyst Amr Taha noted that these liquidations created cascading margin calls. High-leverage traders faced automatic position closures as Bitcoin’s price moved rapidly.
The liquidation events reflected typical market behavior during short-term corrections. Rapid price movements often force the closure of margin positions, which can intensify selling pressure temporarily.
While short-term traders absorbed losses, long-term holders responded differently to the volatility. On-chain data shows these investors used the price dip as a buying opportunity.
Long-Term Holders Accumulate During Volatility
Long-term holder realized capitalization surged past $28 billion during the recent market stress. This measure tracks the total value paid for coins held by long-term investors. The level had not been seen since April.
Long-term holder accumulation during liquidation events suggests confidence in Bitcoin’s future value. These investors typically interpret short-term volatility as opportunities to increase their positions.
Historical patterns show that accumulation by long-term holders during volatile periods often precedes upward price movements. Their buying removes coins from circulation and reduces selling pressure.
The contrasting behavior between short-term and long-term participants highlights different market approaches. While leveraged traders faced forced selling, patient investors strengthened their positions.
Taha described this as strategic accumulation during market stress. He noted that long-term holders show conviction by buying during liquidation-driven price drops.
The reset of leveraged positions combined with structural accumulation may set the stage for Bitcoin’s next move higher. With speculative positions cleared, the market foundation appears more stable.
Bitcoin currently trades at $109,874, representing a 2.3% daily increase. The cryptocurrency hit resistance twice at the $110,000 level but maintains its position above the key $109,000 support zone.
