Bitcoin (BTC) experienced a significant surge on Tuesday, marking its largest daily return since May 8 with a 5.81% gain. This rally has coincided with the formation of a bullish engulfing pattern, representing the first notable structural shift on the daily chart in the fourth quarter. Market participants are now evaluating the increased likelihood of a sustained recovery in the upcoming days.
Key Takeaways
- •Bitcoin formed a bullish engulfing candle, achieving its strongest daily gain since May and indicating early signs of trend expansion.
- •A daily close above $96,000 is necessary for complete bullish confirmation.
- •Buy-side trading activity reached its highest point of the current bull market, with the Coinbase Premium turning positive.
Bitcoin Structure Improves, But Major Confirmation Lies Above $96,000
Bitcoin's rally on Tuesday established a clear pattern of higher highs and higher lows, following a liquidity sweep below $84,000 on Monday. This suggests a waning momentum for sellers. The breakout was supported by strong trading volume, indicating genuine demand rather than a move driven solely by stop-loss hunting.
High-volume breakouts typically lead to more sustained follow-through, as they reflect active participation from directional buyers rather than just passive market makers.
A bullish break of structure (BOS) above $92,300 is now in development. A confirmed BOS would signal a decisive upward shift in the short-term trend, even if Bitcoin briefly retests the fair value gap (FVG) between $90,000 and $88,000 while continuing its upward trajectory.
Conviction on the daily chart remains incomplete until Bitcoin achieves a closing price above $96,000. This level is crucial as it represents a BOS on the higher time frame. Overcoming this resistance would confirm a complete structural trend change, moving beyond a mere relief bounce.
Once Bitcoin reclaims $96,000 on a daily closing basis, its immediate target zone extends towards $102,000–$107,000. This range holds a significant cluster of external liquidity, encompassing previous swing highs, unmitigated stop-loss pockets, and liquidity from breakout traders positioned above prior resistance levels.
In terms of market structure, these areas often act as magnets; once the final barrier, in this case, the $96,000 level, is decisively broken.
Aggressive Buy-Side Flow and Improving Premium Support the Recovery
Data from CryptoQuant indicates a surge in the market buy-to-sell ratio to 1.17, its strongest reading since the current cycle began in January 2023. Such pronounced buy-side dominance is typically observed in the early stages of expansion phases when structural flows accelerate.
Concurrently, the Coinbase Premium Index has turned positive, reaching +0.03 after weeks of selling pressure from the United States. Positive premium readings historically signify renewed demand from institutional investors. Binance spot and perpetual volumes are also rising in parallel, and the price differential between Binance and Coinbase has narrowed, reflecting healthier global liquidity conditions.