Bitcoin has pulled back from its recent highs and is currently testing a crucial support zone around the $104,985 level. The cryptocurrency appears to be consolidating after reaching peaks near $111,151, with price action suggesting a potential deeper correction could be in the works.
The Fibonacci retracement tool reveals several key levels that could act as resistance during this pullback phase. The 38.2% retracement sits at approximately $106,598, while the 50% level is positioned around $107,000. A more significant correction could extend toward the 61.8% Fibonacci level at $107,986, which aligns closely with an area of interest at $108K.
Mixed Bitcoin Signals
Currently trading at $108,789, Bitcoin is already trading below a short-term ascending trend line support, challenging the previous uptrend. However, the longer-term trend line that has guided the uptrend since early 2024 appears to be holding as dynamic support, reinforcing the view that this could be a healthy pullback within a larger bull market.
However, momentum indicators are showing signs of weakening bullish pressure. The stochastic oscillator has moved into oversold territory in the lower panel, with both the %K and %D lines pointing downward. This suggests that selling pressure has intensified in the near term, though oversold readings often precede bounces in trending markets.
The MACD histogram below the price chart shows diminishing bullish momentum, with the bars becoming smaller and approaching the zero line. While the MACD lines haven’t crossed bearishly yet, the convergence suggests that the recent upward momentum is waning and bears could be gaining control.
Key Levels And Outlook
Bitcoin’s ability to hold above the current support cluster around $104,985 will be crucial for maintaining the longer-term bullish outlook. A sustained break below this level could open the door for a deeper correction toward the ascending trend line support, which currently sits in the $100,000-$102,000 range.
On the upside, reclaiming the $107,000-$108,000 resistance zone would signal that buyers are stepping back in and could pave the way for a retest of the recent highs. The cryptocurrency would need to show strong bullish momentum and ideally form reversal candlestick patterns at key support levels to confirm that the correction has run its course.
Volume patterns suggest that while selling interest has picked up, it hasn’t reached panic levels yet. This measured selling could indicate that institutional holders are taking profits rather than completely abandoning their positions, which would be more constructive for the longer-term outlook.
Overall, Bitcoin appears to be in a consolidation phase after its impressive run higher. While the immediate bias may be slightly bearish due to momentum indicators, the longer-term trend remains bullish as long as key support levels hold and the ascending trend line continues to act as a floor for price action.
Market developments and overall risk sentiment could be crucial in sustaining directional moves, pending updates in international trade, US government debt, and geopolitical tensions that could impact demand for riskier holdings like crypto.
