NEW YORK, NY – Bitcoin’s price surged to $110,500 on Thursday, but the rally is facing significant headwinds as multiple technical indicators warn that the upward momentum may be fading. Analysts are pointing to bearish signals across several timeframes, suggesting that recent price gains near all-time highs could be a trap for unsuspecting investors, raising the risk of a near-term pullback.
The primary cause for concern among technical analysts is a “bearish divergence.” This pattern occurs when an asset’s price continues to climb while key momentum indicators, such as the relative strength index (RSI), trend downward. This disconnect suggests the bullish drive behind the price is weakening.
These warning signals have been flagged on Bitcoin’s 15-minute, one-hour, and four-hour charts. A similar divergence also appeared on the daily chart back in May, coinciding with Bitcoin’s all-time high of $111,800. Although the price has since recovered from a brief dip below $100,000, the divergence remains, indicating that underlying bearish pressure could still influence the market.
Friday’s stronger-than-expected U.S. Non-Farm Payroll (NFP) data initially helped push Bitcoin toward $110,000. However, the cryptocurrency failed to hold that level, with the rejection signaling potential exhaustion among buyers at the current price range. The immediate support target for a potential decline is seen between $106,000 and $107,500.
Market sentiment appears to be one of caution rather than conviction. In a post on X, Vetle Lunde of K33 Research highlighted that funding rates for perpetual futures have remained neutral, even with Bitcoin trading near its record high. This lack of aggressive long positions shows that many traders are not fully convinced that the price will continue to rise.
Opinions among traders are split on Bitcoin’s next move. Some, like pseudonymous trader Byzantine General, believe that based on futures data, the cryptocurrency could be positioning for a push toward $112,000.
However, other market data reveals increasing sell pressure. A large cluster of sell orders has been identified around the $110,000 zone, a typical sign that investors are looking to take profits at a key resistance level.
Meanwhile, trader KillaXBT noted that Bitcoin has been executing “liquidity sweeps,” where the price briefly breaks above resistance or below support only to reverse direction sharply. These fakeouts are often intended to trigger liquidations of leveraged positions before a more sustained directional move occurs.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
