Bitcoin (BTC) Price Analysis: Smart DCA Flashes—What This Means as Signs of Bullish Momentum Emerge

Bitcoin price performance over the past week has been marked by volatility and mixed signals for investors. After briefly rising above the $100,000 price mark on Tuesday, BTC has since fallen back and now hovers just above $99,000.

Bitcoin (BTC) price action has been closely monitored by investors throughout the past week, with moments of volatility and varying signals. After a brief surge above the $100,000 price mark on Tuesday, BTC has since retraced and now trades just above $99,000.

The rebound that initially sparked optimism appears to have been short-lived, as the cryptocurrency now struggles to regain the upward momentum necessary to break through higher resistance levels.

Bitcoin Smart DCA Flashes—Here's What It Means

As BTC navigates these ups and downs, Darkfost, a contributor on CryptoQuant’s QuickTake platform, highlighted a potential opportunity for investors utilizing a dollar-cost averaging (DCA) strategy.

According to Darkfost, the Smart DCA indicator recently triggered, suggesting that current price levels could be a “favorable” entry point for those seeking to gradually accumulate BTC over time.

Darkfost explained that this indicator aims to identify optimal zones for long-term accumulation by comparing Bitcoin’s average price to its short-term realized price, which can range from one week to one month. The analyst added:

When executed properly, a DCA strategy can generate significant returns in the short, mid, or long term, depending on the investor's goals. However, this indicator should be used in conjunction with other metrics and a broader market analysis for optimal accuracy and effectiveness.

Short-term price fluctuations have left some investors rattled, but other analysts are highlighting underlying trends that could indicate bullish potential. Another CryptoQuant analyst, Onatt, observed that buying activity appears to be outpacing selling pressure.

Using data from Coinbase, Onatt noted a visible premium, indicating strong demand for Bitcoin despite the recent volatility. Furthermore, negative funding rates, driven by about $2 billion in long liquidations, suggest a market environment where buyers are utilizing discounted prices to position themselves for a potential upward movement. Onatt also explained:

Adding to this sentiment, analyst Ali pinpointed a critical demand zone for Bitcoin between $96,475 and $99,360. According to Ali, as long as this range acts as a support level, the market outlook favors the bulls.

A breakout above the $102,350 to $103,900 supply zone could amplify the bullish case, potentially setting the stage for a sustained recovery.

#Bitcoin $BTC has reclaimed a critical demand zone between $96,475 and $99,360 as support.

As long as this level holds, the odds favor the bulls; especially if the $102,350-$103,900 supply breaks.

pic.twitter.com/FLpwRqYVuu

— Ali (@ali_charts) February 4, 2025