Bitcoin (BTC) rose 5.81% on Tuesday, marking its biggest single-day return since May 8th. As the rally unfolded, a bullish engulfing pattern formed, with the first major structural change seen on the daily chart in the fourth quarter. Traders are now wondering whether a sustained recovery is more likely going forward.
Important points:
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Bitcoin posted a bullish engulfing candlestick with its highest daily rate of increase since May, signaling an early trend extension.
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For full bullish confirmation, the daily close would need to exceed $96,000.
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With the Coinbase premium turning positive, buy-side trades soared to the highest of the entire bull market.
Bitcoin structure improves, but major support remains above $96,000
BTC’s rally on Tuesday established a clear high-low pattern after liquidity fell below $84,000 on Monday, suggesting sellers are losing momentum. This breakout was supported by strong volume indicating demand rather than a stop loss hunting driven move.
Large breakouts tend to produce cleaner follow-through as they reflect the active participation of directional buyers, not just passive market makers.
A bullish break of structure (BOS) above $92,300 is currently forming. If BOS is confirmed, the short-term trend will definitively shift upwards, even if BTC briefly revisits the fair value gap (FVG) between $90,000 and $88,000 while continuing to rise.
The daily chart still lacks complete confidence until Bitcoin closes above $96,000. This level is important because it represents the BOS on a higher time frame. If it clears that, we will see a complete change in the trend structure, not just a rescue rebound.
With $96,000 recovered on a daily closing price basis, BTC’s immediate target zone widens towards $102,000 to $107,000, leaving a large chunk of external liquidity there. This range includes liquidity from previous swing highs, unmitigated stop-loss pockets, and breakout traders above previous resistance levels.
From a market structure perspective, these areas act like magnets. Once a definitive breakout breaks through the final barrier, in this case the $96,000 level.
Related: Bitcoin adds $732 billion in new capital this cycle as market structure changes
Aggressive buy-side flows and rising premiums support recovery
According to CryptoQuant data, the market buy/sell ratio jumped to 1.17, the strongest reading since the cycle began in January 2023. This aggressive buy-side advantage typically emerges early in the expansion phase when structural flows accelerate.
Meanwhile, the Coinbase Premium Index moved to a positive value of +0.03 after weeks of US selling pressure. A positive premium measure historically indicates renewed institutional demand. Binance’s spot trading volume and perpetual trading volume are also increasing in parallel, and the price difference between Binance and Coinbase is narrowing, reflecting healthy global liquidity.
Related: Bitcoin Bollinger Bands repeat “parabolic” bullish signal from late 2023
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 decisions.
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 decisions. While Cointelegraph strives to provide accurate and timely information, we do not guarantee the accuracy, completeness, or reliability of the information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph is not responsible for any loss or damage arising from reliance on this information.
