Bitcoin price has risen to 110,500 USD on Thursday but is facing resistance as many bearish divergence signals appear across different time frames.
On the 15-minute, 1-hour, and 4-hour charts, technical analysts have pointed out divergence signals, where price continues to rise while momentum indicators, such as the relative strength index (RSI), are trending downward. This indicates that bullish strength is waning, increasing the risk of a short-term correction.
Bitcoin bearish divergence 15 minutes, 1 hour, 4 hours, 1 day | Source: Cointelegraph
When examining the daily chart, the cautious outlook is further reinforced. In May, a clear bearish divergence appeared between price and momentum indicators, coinciding with Bitcoin's all-time high of 111,800 USD. Although it has dipped below 100,000 USD at times since then, the divergence remains intact, suggesting that underlying bearish pressure could still be at play. Bitcoin's immediate target below remains in the range of 107,500 to 106,000 USD.
This bearish trend is further reinforced after the U.S. Non-Farm Payroll (NFP) data released on Friday came in hotter than expected. Although the initial labor report helped push Bitcoin towards 110,000 USD, the bulls were unable to maintain this breakout. The rejection at this key psychological level could signal exhaustion at current highs.
It is noteworthy that the funding rate remains neutral. In a post on X, Vetle Lunde of K33 Research pointed out that the funding rate for perpetual futures remains stable, even as BTC hits its all-time high. The lack of strong buying positions suggests that traders may not fully trust a sustainable breakout, which is consistent with current technical divergences.
7-day average funding rate of Bitcoin | Source: Vetle Lunde/X
Is Bitcoin's surge to 110,000 USD a trap for bulls or bears?
As Bitcoin consolidates just below the 110,000 USD level, investors remain divided on the next major move. Anonymous trader Byzantine General shared a chart suggesting Bitcoin may be gearing up for a breakout to 112,000 USD based on futures data. This setup indicates an increase in open interest alongside price, which in the past has often led to higher targets.
However, the order books in the market are starting to reflect increased selling pressure. A large cluster of sell volume has appeared around the 110,000 USD level, often a sign that investors may be closing positions at the resistance level. This is consistent with recent behavior at previous all-time highs, where rejection zones often attract liquidity to exit orders.
Source: Maartunn/X
Meanwhile, trader KillaXBT pointed out that Bitcoin has executed liquidity sweeps at resistance levels and below support levels, only to quickly reverse. These fakeouts are often designed to shake out leveraged positions before a real move occurs.
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