Bitcoin Faces Resistance: Bearish Signals Emerge
Bitcoin Price Action: A Cautious Outlook
Bitcoin (BTC) recently reached $110,500, but this rally is showing signs of weakening. Multiple bearish divergences are appearing across various timeframes, signaling potential pullback.
- Bearish Divergences: Technical analysts have identified divergences on the 15-minute, 1-hour, and 4-hour charts. Price increases while momentum indicators like the Relative Strength Index (RSI) trend downward, suggesting waning bullish momentum.
- One-Day Chart Confirmation: The one-day chart reveals a bearish divergence from May, coinciding with Bitcoin's all-time high of $111,800. This reinforces the potential for continued bearish pressure, with a possible immediate target between $107,500 and $106,000.
- NFP Data Impact: Friday's stronger-than-expected US Non-Farm Payroll (NFP) data initially boosted BTC towards $110,000, but the subsequent rejection at this level indicates potential exhaustion.
- Neutral Funding Rates: Despite the price action, perpetual futures funding rates remain flat, indicating a lack of aggressive long positions and trader uncertainty regarding a sustained breakout.
Was the Rally a Trap?
The recent price action leaves traders divided. Some anticipate a push towards $112,000 based on futures data and open interest. However, increasing sell pressure and liquidity sweeps around the $110,000 level suggest these breakouts might be traps designed to flush out leveraged positions.
Increased Sell Pressure: Market order books show a cluster of high-taker sell volume around $110,000, indicating potential profit-taking and resistance.
Liquidity Sweeps: Bitcoin has been executing liquidity sweeps above resistance and below support, followed by rapid reversals, suggesting a potential manipulation of market sentiment.
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Disclaimer: This article does not constitute investment advice. All investment decisions involve risk.