Analyst Suggests Bitcoin May Reach $112,000, But Only If It Maintains This Crucial Support Level

In a recent post on X, experienced crypto analyst Ali Martinez emphasized that, through price band analysis, Bitcoin (BTC) could potentially skyrocket to $112,000 if it manages to break and sustain itself above a critical level.

Analyst Identifies Critical Bitcoin Level

After a minor increase following the US Federal Reserve’s decision to slow down the drawdown of its balance sheet, Bitcoin is currently trading within the low $80,000 range. However, Martinez suggests that this leading cryptocurrency might hit a new all-time high (ATH) if specific conditions are met.

By utilizing Market Value to Realized Value (MVRV) Extreme Deviation Pricing Bands, Martinez highlighted two important price levels that could dictate Bitcoin’s next significant movement. He stated that if BTC breaks and maintains a position above $94,000, it possesses a ‘high probability’ of climbing to $112,000.

Conversely, should BTC drop below $76,000, it may face a decline to $58,000 – or even $44,000 – if market conditions turn negative. Notably, BTC previously reached $76,606 on March 10 before recovering to its current trading range in the low $80,000s.

For those unfamiliar, MVRV Extreme Deviation Pricing Bands assess whether an asset like Bitcoin is overvalued or undervalued compared to its historical averages. This analysis aids in identifying potential market tops – when the market might be overbought – or bottoms – indicating a potential buying opportunity.

According to Martinez’s chart, BTC is currently trading between the mean – represented by the yellow band – and +0.5 standard deviation – indicated by the orange band. A persistent breakout above or below these bands could signal Bitcoin’s next significant price direction.

Another crypto analyst, Rekt Capital, remarked that Bitcoin is currently retesting the critical $84,000 support level. Successfully holding this price could enable BTC to challenge the $94,000 resistance, potentially setting the stage for a new ATH. The analyst commented:

BTC has produced long wicks below this level before, which is why a Daily Close above $84k is essential for this retest to be successful.

Could BTC Experience A Short Squeeze?

In another post on X, crypto trader Merlijn The Trader indicated that prevailing pessimism regarding BTC’s recent price movements might trigger a substantial short squeeze. According to the analyst, approximately $2 billion in short positions could be liquidated if BTC reaches $87,000, potentially leading to an even more significant price surge.

Further supporting the bullish sentiment, crypto entrepreneur Arthur Hayes mentioned that BTC’s decline to $77,000 on March 10 might have marked the bottom of this market cycle. As of this writing, BTC is trading at $84,043, reflecting a 2% decrease over the past 24 hours.