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After strong U.S. employment data, the Bitcoin price rally stalled after returning to $110,000, with resistance above at $112,000 and several key support levels below.
Key points:
Bitcoin has repeatedly fallen below $110,000, indicating that bulls are struggling to maintain higher prices.
If the key level is lost, the BTC price could drop to $105,000 in the short term.
Due to stronger-than-expected U.S. employment data, hopes for a rate cut before September were dashed, and Bitcoin bulls faced setbacks while trying to reclaim the $110,000 support level.
This is the third failed attempt since the historical high in May, raising doubts about whether Bitcoin can break through $110,000 and enter the price discovery phase again.
BTC/USD four-hour chart.
Bitcoin price faces the risk of a deeper pullback.
Historically, multiple rejections near historical highs have led to significant drops in BTC prices.
For example, Bitcoin's price fell multiple times from the level of $107,000 in January, only 2% lower than the historical high of $109,000 reached on January 20. In the following two weeks, the price dropped 14%.
Similarly, after multiple breakthroughs of the $72,000 resistance level, the BTC price plummeted 18% within 10 days, nearing the historical high of $73,800 set on March 14, 2024.
BTC/USD price chart showing the trend of declining from historical highs.
If history repeats itself, the BTC/USD pair could drop 14%-18% from the current price level.
Technical indicators such as the bearish divergence in the relative strength index (where price makes higher highs but RSI forms lower highs) reinforce the resistance level at $110,000.
Additionally, the high buy-sell volume around $110,000 and the neutral funding rate in the futures market indicate that retail investors are taking profits and hesitating, thereby increasing the likelihood of a pullback.
Key Bitcoin price levels to watch below $110,000.
The data shows that the Bitcoin price is currently trading at $109,100, while $110,000 remains a key resistance level. The BTC/USD currency pair needs to break through this level to end the months-long consolidation.
Above this, there is a major supply zone from $110,000 to $112,000, which bulls must overcome to return to the price discovery phase.
BTC/USD four-hour chart.
Conversely, bears will attempt to defend the resistance level at $110,000, increasing the likelihood of pushing prices down.
A key area of focus is located between $107,500 (where the 50-day simple moving average (SMA) is currently positioned) and $106,000 (where the 100-day and 200-day SMA seem to converge).
Another area worth watching is from the local low of $105,200 (reached on Wednesday) to the psychological level of $104,000.
If Bitcoin breaks the support level between $108,000 and $107,500, a deeper pullback may occur. If this area holds, Bitcoin may set a new historical high in the coming weeks.
BTC/USD chart.
According to CoinGlass data, the BTC/USDT three-day liquidation heat map shows that the largest liquidity cluster is $121 million, slightly above $110,000.
Therefore, if the level of $110,000 is broken, a short squeeze may occur, potentially forcing short sellers to cover and pushing the price down to $114,000.
BTC/USDT three-day liquidation heat map.
On the downside, a significant number of buy orders are around $108,000, with the next important cluster range between $107,700 and $105,000.
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