Bitcoin has rebounded nearly 5% from today’s lows near $88,400 and is just on the edge of falling wedge support. Although the rebound was strong, it was only up 2% on the daily chart. Admittedly, it doesn’t do justice to the strength the Bitcoin price has shown over the past few hours.
This move happened quickly, following the price and briefly touching the lower trendline, raising questions as to whether this could be the beginning of a near-term bottom. However, no matter how strong the rebound seems, it is still one, or rather two, major resistance zones that determine whether the trend has reversed or not.
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Falling Wedge Rebound and Rare On-Chain Divergence Emergence
The falling wedge has been guiding Bitcoin’s decline for weeks, but today’s reaction shows that the lower bound remains active. What makes bounces more interesting is the on-chain behavior behind them.
From November 14th to November 19th, Bitcoin price hit a new low, but the SOPR (expended output return) increased from 0.98 to 0.99, making a new low. SOPR indicates whether the coin used was purchased with a profit or a loss. When SOPR falls below 1, most traders sell at a loss.
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If the price continues to fall and then rises, it means that holders are not panic selling and are refusing to let go at a lower price. It is an expression of strong belief.
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A similar pattern was seen between March 30th and April 8th. Even though the market was still in a downtrend, BTC price hit another low at this time, and SOPR rose from 0.994 to 0.998. This divergence has bottomed out. From there, Bitcoin soared 46% within a few weeks, from $76,270 to $111,695.
The same style of on-chain divergence is flashing again within the falling wedge. Note that technical divergences can fail in severe downtrends. On-chain divergences become more important because they reflect actual spending behavior rather than just chart patterns.
Heavy supply zone still prevents trend reversal
However, for SOPR divergence to occur, Bitcoin price must exceed an important level.
Glassnode’s URPD (UTXO Realized Price Distribution) data shows two supply clusters that sit just above the current rebound. The first one costs about $95,900 and the second one costs nearly $100,900.
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These levels also coincide with major technical resistance zones, which we will discuss next.
UTXO Realized Price Distribution (URPD) shows the last amount of supply moved at each price level. This highlights where there are large clusters of holders, often acting as support or resistance.
In these areas, many past buyers may try to exit again. Clearing both levels confirms that the pullback turns into a trend reversal.
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Important Bitcoin price levels
Bitcoin price first needs to break above $95,700, the same level where it refused to recover on November 15th. This resistance level is also consistent with the first URPD cluster described above.
If this can be cleared, there is a possibility of attacking the Fibonacci barrier at $100,200, which is located below the $100,900 URPD cluster. Only above this zone can the descending wedge truly reverse into a bullish direction.
If BTC price loses its recent low of $88,400 near the bottom of the wedge, there is a risk that the price could fall if the market weakens.
So far, Bitcoin has achieved clean wedge bounces and rare on-chain divergences. When these two come together, the possibility of forming a bottom increases. However, the resistance at $95,700 and then $100,200 still determines whether Bitcoin has just turned bullish or if this is just a temporary pullback.
