Bitcoin is on a remarkable ascent, nearing historic levels. However, a major technical barrier could potentially hinder its rise. Delve into technical analysis, volumes, and market signals to understand the significance of the critical $110,000 threshold and what could shift the balance.
Bitcoin shows signs of weakening momentum as bearish divergences appear across multiple timeframes. On the 15-minute, 1-hour, and 4-hour charts, indicators like the RSI reveal a downward trend even as Bitcoin’s price rises. This suggests fading bullish strength and increases the risk of a short-term pullback.
Bitcoin 15min, 1 hour, 4 hours and 1 day. Source: TradingView
Looking at the daily chart, this cautious outlook strengthens. Last May, a clear bearish divergence formed between price and momentum indicators. This coincided with Bitcoin’s all-time high of $111,800. Although BTC has since dropped below $100,000, this divergence remains visible. It suggests that underlying bearish pressures could still manifest. The immediate support zone sits between $107,500 and $106,000.
This bearish outlook was reinforced by Friday’s surprisingly favorable US Non-Farm Payroll figures. Although this report initially helped BTC approach $110,000, bulls failed to maintain this breakthrough. This rejection at this important psychological threshold could signal some fatigue at these elevated price levels.
Interestingly, funding rates remain neutral. According to analyst Vetle Lunde from K33 Research, the perpetual funding rate remains flat despite BTC approaching its all-time high. This lack of aggressive long positions shows that traders aren’t fully convinced of a sustainable breakout. This aligns with the current technical divergences.
As Bitcoin consolidates below the $110,000 mark, the trading community remains divided on the next major price movement. On one side, some anticipate a rally beyond $112,000 based on futures contract data. But on the other hand, increasing selling pressure and liquidity sweeps suggest that breakouts could prove to be traps.
In this context of mixed technical signals, caution is advised. Savvy investors will closely monitor the crypto market’s reaction to this crucial resistance at $110,000 before considering new highs for Bitcoin.
Passionate about the crypto world, he explores the blockchain ecosystem to extract the most essential insights. With his expertise in SEO and web writing, he transforms news and technical analysis into clear, engaging, and impactful content. His goal? To help investors better understand the opportunities and challenges of the crypto market.
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