Bitcoin began the new week on a weak note, despite posting three consecutive green candles over the weekend. The upward move originated from the $106,500 support level and briefly pushed above last week’s high during early Asian trading on Monday. However, bullish momentum stalled near $108,800 — a key resistance zone at the upper boundary of a descending trend channel that has defined Bitcoin’s price action since May.
With trading now retreating toward the top of this downward-sloping channel, concerns are rising about the sustainability of recent gains. Low trading volume during the rebound suggests limited conviction among market participants, raising the possibility of further downside in the near term.
Technical Outlook: Resistance at $108,800 Halts Momentum
Bitcoin is currently trading around $108,100 as of Monday’s European session, down 0.5% on the day. The failure to sustain momentum above $108,800 has placed bears back in control, at least temporarily. This level marks the confluence of the trend channel resistance and a psychological price barrier, making it a critical juncture for short-term direction.
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A sustained break below this level could open the door to a full retracement of the weekend’s rally, with immediate support located at $106,500. This zone has proven pivotal in recent weeks — acting as both a springboard for rebounds and a magnet for selling pressure when approached from above. If BTC fails to hold this level, the path may clear toward deeper support near $104,000.
The technical structure remains bearish as long as price trades within the descending channel. Each lower high and lower low reinforces the prevailing downtrend. Furthermore, Binance trading volume data shows that last week’s rally occurred on declining activity — a classic sign of weak bullish participation and potential "dead cat bounce" conditions.
Market Sentiment Weighed Down by Macroeconomic Hedges
Beyond technicals, macroeconomic factors are also influencing trader behavior. With a key U.S. tariff decision scheduled for July 9, markets are seeing increased risk-off positioning ahead of potential trade policy shifts. Uncertainty surrounding upcoming negotiations has led some investors to lock in profits or reduce exposure to risk assets like Bitcoin.
While institutional adoption continues to grow — with more public companies adding BTC to their balance sheets — short-term price action remains sensitive to global macro cues. This dynamic highlights Bitcoin’s dual nature: a long-term store of value proposition versus its current role as a liquidity-sensitive speculative asset.
If Bitcoin fails to reclaim and close above the $108,800–$109,000 resistance zone, the risk bias will remain skewed to the downside. A confirmed rejection here could trigger additional selling, especially if accompanied by rising fear metrics or declining on-chain activity.
Conversely, a successful breakout above the descending trend line — particularly on strong volume — would signal renewed bullish conviction and potentially invalidate the bearish pattern. Until then, traders should expect choppy, range-bound behavior between $106,500 and $108,800.
Unwinding Gains: Why Low Volume Raises Red Flags
One of the most telling signs of weakness is the lack of participation during rallies. The recent bounce off $106,500 came amid shrinking trading volumes across major exchanges, including Binance. Historically, such patterns precede consolidation phases or further declines because they reflect insufficient demand to drive sustainable upward movement.
Additionally, open interest in Bitcoin futures on Binance has risen over 6% recently — indicating that traders are positioning for increased volatility. However, without corresponding price strength, rising open interest can sometimes foreshadow sharp liquidations, particularly if sentiment turns decisively bearish.
This environment favors caution. Traders should monitor volume trends closely: a genuine reversal will require not just price breaking resistance, but also a surge in buying pressure visible through higher turnover and inflows into spot and derivatives markets.
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Key Levels to Watch in the Coming Days
As Bitcoin navigates this critical juncture, several price levels will determine the next leg of its journey:
- $108,800–$109,000: Immediate resistance; a daily close above this zone is needed to challenge bearish structure.
- **$106,500**: Primary support; failure here increases odds of testing $104,000.
- $110,000: Psychological barrier and former support-turned-resistance.
- Below $104,000: Would signal breakdown of multi-week structure, inviting deeper correction.
On-chain data also supports a wait-and-see approach. Net unrealized profit/loss (NUPL) metrics suggest the market is neither euphoric nor capitulating — sitting in a “cautious greed” zone where sentiment can shift rapidly based on news or macro developments.
Frequently Asked Questions (FAQ)
Q: Why is Bitcoin struggling to break above $109,000?
A: Bitcoin faces strong resistance at $108,800–$109,000 due to technical barriers (descending trend line) and low trading volume during rallies. Without strong buying pressure, sustained breakout attempts are unlikely.
Q: Is the $106,500 support level reliable?
A: Yes — this level has acted as a turning point multiple times since May. However, repeated tests reduce its strength over time. A decisive close below it would likely accelerate selling.
Q: How do upcoming tariff decisions affect Bitcoin?
A: Tariff uncertainty impacts global risk appetite. As a risk-on asset, Bitcoin often reacts negatively to rising geopolitical or trade tensions ahead of major policy decisions.
Q: Can Bitcoin recover if volume stays low?
A: Sustained recovery is unlikely without rising volume. Low-volume rallies lack institutional participation and are vulnerable to reversal when faced with selling pressure.
Q: What does rising open interest mean for BTC price?
A: Higher open interest suggests traders expect volatility. If aligned with price increases, it signals bullish momentum; if divergent, it may precede sharp corrections or liquidations.
Q: What conditions would confirm a bullish reversal?
A: A daily close above $109,000 on strong volume — especially accompanied by growing spot inflows and stable funding rates — would be needed to confirm renewed bullish control.
Final Thoughts: Patience Amid Uncertainty
Bitcoin’s current pause reflects broader market indecision. While long-term fundamentals remain intact — driven by adoption and scarcity narrative — short-term price action is being dictated by technical structure and macro hedges.
Until there's a clear breakout or breakdown from the current range, sideways movement is likely. Traders should focus on risk management, watch volume signals closely, and prepare for increased volatility around key dates like the July 9 tariff announcement.
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The coming week could define Bitcoin’s trajectory heading into mid-2025. Whether it resumes its climb or enters a deeper correction will depend on how it handles critical support and resistance levels — and whether confidence returns to fuel the next leg up.
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