Important takeouts:
Bitcoin shows bearish divergence in multiple time frames, showing weak bullish momentum and potential pullbacks.
While some traders expect a rally of over $112,000, the increased selling pressure and liquidity sweep suggest that the breakout is a trap.
Bitcoin (BTC) prices rose to $110,500 on Thursday, but cryptocurrencies are encountering ceilings as multiple bearish divergences flash in different time frames.
On the 15-minute, 1-hour, and 4-hour chart, technical analysts flag divergent signals that continue to rise during momentum indicators such as low-trend relative intensity indexes. This suggests that bull drives will weaken, increasing the risk of short-term pullbacks.
Zooming out to the charts of the day will enhance your cautious outlook. In May, a clear divergence of bearish emerged between the price and momentum indicators, matching Bitcoin’s all-time high of $111,800. The BTC has since been shortly below $100,000, but the divergence remains intact, suggesting that the underlying bears could still affect it. The direct targets below remain between $107,500 and $106,000.
This bearish bias was strengthened after US Non-Agricultural Payroll (NFP) data on Friday. The labor report initially helped push BTC to $110,000, but the Bulls were unable to maintain that breakout. Rejection at this important psychological level can indicate fatigue at high current ranges.
Interestingly, the funding rate remains neutral. In X-Post, K33 Research’s Vetle Lunde pointed out that even when BTC is brushing against the highest ever-growing range, the persistent futures financing rate remains flat. This lack of aggressive long positioning indicates that traders may not be entirely convinced of a sustained breakout that coincides with current technical differences.
Related: Bitcoin price rose 80% BTC funding rate turned red
Was the Bitcoin rally for $110,000?
Bitcoin will merge just below the $110,000 level, so traders will remain split up in the next big move.
The Byzantine General, a pseudonymous trader, shared the charts, noting that Bitcoin could be wrapping a $112,000 break based on futures data. This setup suggests open interest at prices that have historically brought higher targets.
Meanwhile, the book of market order is beginning to reflect increased selling pressure. A cluster of high taker sales has appeared around the $110,000 zone. It is usually a sign that investors could close their positions with resistance. This coincides with recent behavior near past highs where exclusion zones often elicit exit fluidity.
Meanwhile, trader KillaxBT pointed out that Bitcoin is running just to quickly reverse liquidity sweep, which is above resistance levels and below support. These false outs are designed to flush out leveraged positions before actual directional movements unfold.
Related: Bitcoin, holding $109k, proves that the Bulls have control over the market. Will new highs occur today?
This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.
