Bitcoin is currently trading around $108,891, finding itself at a critical juncture as price action recently broke above a descending triangle pattern and has since pulled back for a retest around the $108K support.
The cryptocurrency appears to be consolidating within this narrowing range, with the upper boundary acting as dynamic resistance while horizontal support around $106,925 has been holding firm. The Fibonacci extension levels from the recent correction provide crucial insight into potential areas where buyers are aiming.
The 38.2% extension level sits at $109,937, which has already been tested and broken, suggesting weakening bullish momentum. The 50% Fibonacci level at $110,412 represents the next significant resistance zone, while sustained upside pressure could see Bitcoin test the 61.8% extension at $110,886 next.
Moving Averages Signal Caution
The moving average structure presents a mixed picture for Bitcoin’s near-term prospects. While price is currently trading above both the 100 SMA (blue line) and 200 SMA (red line), the gap between these key indicators appears to be narrowing, suggesting that bullish momentum may be waning.
The 100 SMA is positioned above the 200 SMA, technically confirming that the path of least resistance remains to the upside, though this configuration could face pressure if the current consolidation extends.
Price action has been respecting the ascending trend line support that originates from earlier lows, but the descending triangle formation suggests that this support could be tested more aggressively in the coming sessions.
A decisive break below the triangle’s lower boundary around $106,925 could signal a more significant correction toward the $105,000 psychological level or lower.
Potential Trend Reversal
The stochastic oscillator has been oscillating within the middle range, neither reaching extreme overbought nor oversold conditions, which indicates indecision among market participants. However, recent readings suggest that the oscillator is beginning to turn lower from the upper portion of its range, potentially signaling that selling pressure could intensify.
Meanwhile, the MACD histogram shows diminishing bullish momentum, with the signal line appearing to flatten near current levels. This technical setup often precedes either a consolidation phase or a more pronounced directional move, making the next few sessions critical for determining Bitcoin’s short-term trajectory.
From a broader perspective, Bitcoin remains within the confines of its longer-term uptrend, but the current technical setup suggests that traders should exercise caution.
A break above the 50% Fibonacci retracement level could reignite bullish sentiment and target the previous highs around $112,000. Conversely, a breakdown below the triangle support could trigger a move toward the $105,000-$104,000 zone, where longer-term buyers might emerge to defend the broader uptrend structure.
Crypto traders appear to be holding out for broader financial market developments while at the same time locking in profits from earlier long bitcoin positions, leading the latest rally to lose some steam at key inflection points. Markets appear to be focused on the looming Senate vote on Trump’s tax proposal, as the outcome could shape the US fiscal trajectory and appetite for riskier assets.
