Bitcoin Hits $106K Then Dips: Bullish Setup Still in Play

Bitcoin faced sharp volatility over the weekend as it briefly surged to $106,000 before tumbling back to $103,000 within hours, a sudden swing that liquidated over $600 million in crypto positions. The dramatic move occurred in a low-liquidity environment, catching both bulls and bears off guard, and underlining the asset's sensitivity to thin trading conditions.

The failed breakout attempt marked the third time Bitcoin has tested the top of its current trading range, solidifying $106K as a tough resistance level. Despite the sharp rejection, analysts remain optimistic. Crypto strategist Mags notes that the latest price action, while turbulent, is part of a larger bullish structure.

Mags highlights that retests of resistance after reclaiming a range often don’t yield immediate breakouts. However, he sees this as a setup for further gains, presenting two likely scenarios, both with bullish outcomes.

In the first, Bitcoin consolidates just below the resistance before breaking out decisively. This type of breakout, though rare, tends to be explosive, driven by surprise and momentum. If the market pauses slightly before surging past $106K, it could mark the beginning of the next major rally.

The second scenario envisions a short-term pullback. Bitcoin could dip to the middle of the range, around $99,400, or slightly lower, before resuming its upward trajectory. This would allow the market to reset and establish stronger support, laying the groundwork for a more stable climb.

Mags emphasizes that the recent rejection should not be viewed as bearish. Instead, it's a common phase in market structure, often preceding significant upward moves. With inflation concerns and broader economic uncertainty still looming, Bitcoin’s resilience near its highs is encouraging for long-term bulls.

As traders monitor the next moves, attention remains fixed on whether Bitcoin can build the momentum needed for a clean breakout—or if a short-term dip is on the cards before it resumes its climb. Either way, the broader outlook remains tilted toward further upside.