Bitcoin Targets $115K After Strong Rebound from Flash Crash

Bitcoin (BTC) has made a strong recovery after a sharp flash crash earlier this week, with its price quickly bouncing back above $100,000 and setting its sights on the $115,000 mark. The cryptocurrency’s swift rebound from a brief dip to $90,500 on December 5 has reignited bullish sentiment, positioning Bitcoin for a potential upward move.

Recovery from Flash Crash

Bitcoin experienced a dramatic 14% drop from its all-time high of $104,600, plunging to as low as $90,500 in just one hour on December 5. The sharp decline triggered over $400 million in liquidations, marking the largest liquidation event since 2021. Despite the flash crash, Bitcoin’s price has since rallied by 4.57%, maintaining a bullish position above all major exponential moving averages (EMAs) on the four-hour chart. This recovery has left Bitcoin above the critical $100,000 level, a key psychological and technical milestone.

Key Price Metrics Reset

One of the most significant takeaways from the flash crash is the reset in Bitcoin’s funding rate. The liquidation event caused a sharp decline in open interest, with Bitcoin’s funding rate dropping from 0.09% on December 4 to just 0.01% on December 6. According to Bitcoin futures analyst Byzantine General, this reset is a positive development, suggesting that Bitcoin’s futures market has become more deleveraged, which could pave the way for further upward movement.

Byzantine General noted that if Bitcoin continues to rise after this liquidation cascade, the market could experience "insane" momentum, with little to stop its ascent.

Bearish Spinning Top Candlestick Pattern

Following the sharp volatility, Bitcoin’s one-day chart formed a bearish spinning top candlestick pattern, a signal of indecisiveness in the market. In this pattern, both buyers and sellers push prices in opposite directions, often leading to a period of consolidation or volatility. Historically, similar patterns have appeared at key price milestones for Bitcoin.

Charles Edwards, the founder of Capriole Fund, pointed out that Bitcoin’s price has reacted similarly when crossing major psychological thresholds such as $1,000 and $10,000. He emphasized that this type of volatility is “normal” for Bitcoin and typically precedes continued upward movement. On both previous occasions, Bitcoin experienced short-term bearish fluctuations, only to push higher in the long run.

Fibonacci Extensions Point to $115K Target

Looking ahead, Bitcoin’s immediate target remains at $115,000, representing a 15% increase from the current $100,000 level. This target is supported by Fibonacci extensions, which indicate that the cryptocurrency could continue its ascent. If the relative strength index (RSI) stays under the overbought region, Bitcoin could experience a more aggressive breakout, potentially reaching as high as $124,500. This would mark a significant milestone, with the RSI and Fibonacci extensions suggesting further bullish momentum could be in store for Bitcoin.

In conclusion, Bitcoin’s recent volatility, while unsettling for some, has reset key market metrics and positioned the cryptocurrency for potential gains. With a key price target of $115,000 in sight, Bitcoin’s path appears poised for continued growth, especially if its momentum can be sustained.