Bitcoin struggles to stay above key levels, sparking concerns about a possible price correction.
- Bitcoin rejected near $106,000, risking a fall toward $100,000.
- Momentum indicators suggest a possible drop to $85,000.
- Increased profit-taking may lead to more selling pressure.
Bitcoin Stalls Below Resistance
Bitcoin has been trading in a tight range since May 22, staying below its all-time high of $112,000. For over three weeks, the price has hovered around $104,000 to $105,000. Analysts say $106,000 is a key level. Bitcoin tried to break above it but was quickly pushed back down. This failure caused many traders to close their positions, adding to market pressure.
Can Bitcoin Stay Above $100,000?
Analyst Michaël van de Poppe warned that losing the $105,000 support could send the price down to $100,000. This level is seen as a zone where buyers may return, hoping for a lower entry point. The last time Bitcoin faced a rejection like this, it dropped sharply. Some experts believe this could happen again by the end of June.
RSI Points to Weak Momentum
The Relative Strength Index (RSI) is a tool that tracks price momentum. On the weekly chart, the RSI is showing a bearish signal. While Bitcoin’s price hit higher highs, the RSI made lower highs. This is called a bearish divergence, and it often signals that the upward trend is losing strength. Similar patterns happened before big drops in 2021 and 2019.
Profit-Taking on the Rise
The Net Unrealized Profit/Loss (NUPL) indicator also shows a warning sign. It measures how many holders are in profit. Right now, the NUPL is near the 0.5 to 0.6 zone. In past cycles, this level came just before major price corrections. When many investors are in profit, some of them may decide to sell, adding more pressure to the market. These signs are making some traders cautious.
Could the Price Drop to $85,000?
If Bitcoin keeps falling, experts say it may find support at $85,000. This level lines up with the 50-week exponential moving average, a metric often used to identify long-term trends. This support zone was key during earlier bull runs, so the price may bounce from there again. Some still believe Bitcoin could reach over $150,000 by year-end, but the road may include more dips first.
Source: cointelegraph.com
