Bitcoin eyes $105K – Can liquidity injections spark a bullish rally?

• Bitcoin’s price is correlating with liquidity trends, hinting at a possible hike towards $105k
• Realized cap growth and technical indicators revealed crucial resistance and support zones

Bitcoin [BTC] continues to navigate key resistance levels, with liquidity injections fueling speculation of a rally towards $105k. With BTC’s realized cap increasing and price action aligning with global money supply trends, traders are eyeing whether momentum can sustain a breakout or not. 

Liquidity injections and BTC’s price surge

Bitcoin has been closely mirroring global liquidity trends, with recent injections fueling speculation of a potential hike to $105k. The correlation between BTC’s price and global M2 money supply has historically signaled strong moves. And, the latest data suggested that a renewed uptrend could be underway.

A closer look at Bitcoin’s price movement, alongside the global M2 money supply [yellow line], revealed a strong correlation.

Historically, when liquidity increases, BTC tends to follow suit. In fact, according to the latest data, a fresh uptick in liquidity has coincided with a bounce in Bitcoin’s price from its recent lows near $75k.

The key takeaway here is that Bitcoin’s price has rebounded precisely at a point where global liquidity flashed a sharp recovery. The cryptocurrency could benefit from additional capital inflows if this trend continues. This may provide the fuel needed for a rally towards $105k. 

However, resistance zones remain in place. And, Bitcoin must clear several hurdles before such a breakout becomes a reality.

Bitcoin’s Realized Cap signals market confidence

Another major factor supporting a bullish case for Bitcoin is its realized cap, which has continued to grow.

Here, the realized cap represents the total value of all BTC coins at their last transaction price, often serving as a proxy for investor sentiment and network strength.

According to Glassnode, BTC’s realized cap has risen steadily – A sign that capital is still entering the market, despite short-term price fluctuations. If this trend holds, it could provide a solid foundation for BTC to push past key resistance levels.

Key technical levels to watch

Analyzing Bitcoin’s price action, the 50-day moving average [MA] sat at $88,926 at press time – Acting as the first major resistance level. Meanwhile, the 200-day MA at $96,392 represented a key barrier BTC must break to confirm a sustained rally.

On the downside, BTC has found immediate support around the $80K-$81K range, making this a crucial zone for traders to monitor. A breakdown below this level could invalidate the bullish scenario, potentially leading to a retest of the $75k support.

Can Bitcoin reach $105,000?

For the cryptocurrency to to hit $105k, two major factors must align,

• Sustained liquidity injections – If global M2 money supply keeps increasing, it could drive more capital into BTC
• Breaking key resistance levels – BTC needs to reclaim $88k and $96k, with strong volume to confirm a bullish breakout

While the current setup looks promising, Bitcoin still faces hurdles before confirming a push to new highs. If liquidity conditions remain favorable, BTC’s uptrend could accelerate. Even so, traders should remain cautious of any sudden shifts in macroeconomic trends that could impact liquidity inflows.