6-Month Bullish Trend Becomes a Critical Resistance Zone
The recent retracement to $106,000 has placed Bitcoin in a delicate technical position. Although the price quickly rebounded from this low, BTC now trades below the ascending trendline that supported the upward movement for six months. This trendline, together with the horizontal resistance around $112,000 and the monthly open, forms a triple resistance particularly difficult to break through.
The positive aspect remains that the wick to $106,000 was immediately bought up, pushing BTC’s price to $110,200 this morning. This price action suggests that buyers remain present and ready to defend lower levels. Nevertheless, Bitcoin needs to break through and maintain $110,000 to truly restart the uptrend.
Short-term momentum indicators show encouraging signs. Bitcoin’s price has paused long enough to allow a partial reset of these oscillators. A few additional days of sideways consolidation could complete this technical reset, offering bulls the solid foundation necessary to attempt an assault toward the new ATH.
However, a loss of $106,000 could take BTC toward $104,000 or $101,000.
The 200-Day SMA Plays Its Role as Major Support
On the daily timeframe, the 200-day moving average continues to fulfill its historical role as crucial support. During this bull market, BTC has crossed this important MA several times, briefly confirming below before violently moving back up. Each time the price climbed back above this 200 SMA, powerful rallies followed.
This moving average at $110,000 thus constitutes a major psychological and technical level that bulls vigorously defend. The fact that the price quickly recovered above it after the drop strengthens the hypothesis of a simple liquidation of leveraged positions rather than a true trend reversal.
On the oscillator side, the daily Stochastic RSI has just begun to descend from the overbought zone. However, lower timeframes already show signs of bottoming: the Stochastic RSIs on 4h, 8h, and 12h are touching their respective floors. This divergence between timeframes suggests that an accumulation window could open before the next rally.
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The Monthly Chart Displays Concerning Signals
The monthly timeframe reveals more worrying elements that deserve the attention of medium and long-term investors. With less than 48 hours until the month’s close, the monthly candle presents a particularly significant long upper wick. Comparing with the history of the current bull market and the two peaks of 2021, this wick ranks among the longest ever observed.
Even more problematic, this pattern adds to two previous long monthly wicks, with candle bodies all trapped below the horizontal resistance of $116,000. This configuration dangerously resembles a major rejection of the 8-year bullish trendline that supported the entire bullish structure.
The monthly Stochastic RSI shows its lines beginning to descend, while the classic RSI line has just been rejected by a bearish trendline. This bearish divergence on such a broad timeframe historically constitutes a strong signal of potential cycle reversal. Without immediately invalidating the bullish scenario, these technical elements suggest that a distribution phase could be underway. The coming weeks will be decisive in confirming or invalidating this larger-scale bearish scenario.
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