Bitcoin (BTC) has recently seen a significant shift in momentum as it breaks below two critical support levels, raising concerns about a potential deeper downturn. With the price retreating from the $109,000 resistance zone, traders are now closely watching whether BTC can stabilize above $104,500—or if a drop toward the psychological $100,000 mark becomes inevitable.
This analysis dives into the technical structure of Bitcoin’s current price action, identifies key support and resistance zones, and explores possible scenarios for the coming days. Whether you're a short-term trader or a long-term holder, understanding these dynamics is crucial in navigating the evolving market landscape.
Current Market Structure and Technical Outlook
Bitcoin is currently trading within a tightening consolidation pattern, caught between a descending trendline and a cluster of moving averages on the daily chart. While the upward-sloping 50-day and 200-day simple moving averages (SMA) continue to provide structural support, the failure to sustain momentum above $109,000 suggests weakening bullish conviction.
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The Relative Strength Index (RSI) on the daily timeframe is hovering near the neutral 50 level, indicating neither overbought nor oversold conditions—but more importantly, a lack of strong directional momentum. This indecision often precedes significant price movements, especially after failed breakout attempts.
Key Support and Resistance Zones
- Immediate Resistance: $109,000 – Rejection here on Sunday and Monday marked the start of the current pullback.
- Downside Trendline Resistance: Currently near $107,800 and sloping downward, this dynamic barrier must be cleared for any meaningful recovery.
- First Support Level: $104,500 – A break below this level could accelerate selling pressure.
- Major Psychological Support: $100,000 – A confirmed breakdown here would signal a bearish shift in sentiment.
On the four-hour chart, BTC/USDT has already dropped below key moving averages, including the 20-period exponential moving average (EMA), which now acts as an overhead resistance. This shift typically reflects short-term traders taking profits and bears gaining control.
If buying interest fails to re-emerge around $104,500, the path toward $100,000 becomes increasingly likely. Such a move would keep the pair within a bearish descending triangle formation—a pattern often associated with continued downside pressure.
Potential Scenarios: Bearish Downturn or Bullish Recovery?
Bearish Scenario: Break Below $104,500
A decisive close below $104,500 on the daily chart would confirm a breakdown from recent consolidation. In this case:
- Initial target: $102,300 (previous swing low)
- Secondary target: $100,000 (major psychological level)
- Risk of further extension to $97,500 if momentum builds
Volume analysis will be critical here—increasing volume on down moves would validate bearish momentum.
Bullish Reversal: Break Above the Trendline
For bulls to regain control, two conditions must be met:
- Price must reclaim the 20-period EMA on the four-hour chart.
- A sustained breakout above the descending trendline resistance is required.
Such a move could trigger short-covering and attract new buyers aiming for the neckline of a potential inverse head-and-shoulders pattern forming on the weekly chart. A confirmed breakout above this neckline could open the door toward retesting the all-time high near $111,980.
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On-Chain and Sentiment Indicators
Bitfinex analysts recently noted that Bitcoin may have formed a local top, supported by lagging on-chain metrics such as declining exchange outflows and reduced large-transaction volume. These signals suggest institutional accumulation has paused, with market makers adopting a more defensive stance.
Additionally:
- Net Unrealized Profit/Loss (NUPL): Currently at 2.8, indicating "greed" but not yet extreme euphoria.
- MVRV Ratio: Suggests BTC is still above its realized value, leaving room for correction without entering "capitulation" territory.
- Funding Rates: Slight positive skew in perpetual futures markets, but not excessively leveraged—reducing risk of a violent liquidation cascade.
These metrics collectively suggest that while overbought conditions exist, a full-blown market top isn’t confirmed yet.
Strategic Takeaways for Traders
For active traders:
- Monitor $104,500 closely as the last line of defense before deeper correction.
- Watch for bullish reversal patterns (e.g., hammer candles, RSI divergence) near support.
- Use tight stop-losses if entering long positions below the trendline.
For long-term holders:
- Dips toward $100,000 may present accumulation opportunities if macro conditions remain favorable.
- Keep an eye on U.S. inflation data and Fed policy expectations—macro drivers still play a major role in BTC’s trajectory.
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FAQ Section
Q: Why is $104,500 such an important support level?
A: This level aligns with recent swing lows and coincides with the convergence of multiple moving averages. A break below could trigger algorithmic sell orders and signal weakening demand.
Q: What would confirm a bullish reversal in Bitcoin?
A: A daily close above the descending trendline resistance (currently near $107,800), accompanied by rising volume and RSI breaking above 60, would indicate renewed buying pressure.
Q: Is a drop to $100,000 guaranteed now?
A: Not guaranteed. While risks are tilted to the downside, strong buying interest often emerges near round-number levels like $100,000, especially if broader market sentiment remains stable.
Q: How do on-chain metrics influence price direction?
A: Metrics like exchange outflows, whale accumulation, and transaction volumes reflect underlying supply-demand dynamics. Declining outflows suggest reduced selling pressure, while spikes can signal accumulation or distribution phases.
Q: Can Bitcoin still reach new highs in 2025 despite this pullback?
A: Yes. As long as the broader uptrend remains intact—supported by halving-driven scarcity and growing adoption—corrections like this are normal and often healthy for sustainable growth.
Q: What role does market sentiment play in current price action?
A: Sentiment is currently cautious but not fearful. Social media buzz remains elevated, and retail interest hasn't dried up—both of which can fuel quick rebounds even after sharp drops.
Bitcoin’s current price action reflects a classic battle between bulls defending key technical levels and bears pushing for a deeper correction. While the short-term outlook has turned cautious, the larger structural trend remains intact—for now. Traders should remain agile, using defined support and resistance zones to manage risk effectively.
With volatility likely to persist, leveraging reliable data and technical tools will be essential in staying ahead of rapid market shifts.