Bitcoin Price Analysis: Consolidation Below Key Resistance Signals Bearish Trend

Bitcoin’s price is consolidating below resistance at $108,000, showing signs of distribution and bearish pressure as the RSI drops below 50. A descending channel has formed, and critical support levels are being tested. The whale ratio indicates increased activity from large holders on exchanges, suggesting possible selling pressure ahead.

Bitcoin’s price is currently in a state of consolidation after struggling to push past the $108,000 resistance level. As it stands, the cryptocurrency is fluctuating within a tightening range, signalling potential signs of distribution. The market finds itself sandwiched between two liquidity zones: a buying area that sits above $108,000 and a selling area below $100,000. Recent price movements show a tendency toward the lower edge of this range.

Looking at the momentum indicators, there’s been a noticeable weakening. The Relative Strength Index (RSI) has dipped below 50 on both daily and 4-hour charts, which indicates that bearish sentiment may be gaining traction. Without a significant rally from bulls, the expectation is for prices to test lower levels.

On the daily chart, Bitcoin is trapped in a broader consolidation, resembling a descending triangle below critical resistance. The RSI currently sits around 46, while the price remains perched above an important trendline shown in orange. This particular structure suggests a period of either re-accumulation or distribution for Bitcoin.

If bulls cannot decisively reclaim the $108,000 level, the ascending trendline could become a key focus. Even though the orange 100-day moving average and the blue 200-day moving average are both trending upwards, they’ve recently converged around the $95,000 mark, indicating weakening upward momentum.

The daily trading range of $100,000 to $108,000 is especially significant. Buyers have, so far, managed to absorb dips between $101,000 and $103,000. However, a continued series of lower highs and a failure to convert the $108,000 level into support may suggest the market’s gearing up for a deeper price correction.

Turning to the 4-hour chart, there’s an established descending channel in price action. This consistent trend of lower highs demonstrates ongoing bearish pressure, and the crucial support at $103,500 is being tested repeatedly. This formation typically indicates a bearish continuation pattern. With the RSI hovering around 41, the prevailing momentum leans towards further declines.

The current price struggles to break through the fair value gap at $106,000, confirming that sellers are effectively maintaining control over the premium levels. Market watchers should brace for a potential sweep of liquidity at the $102,000 and $103,000 levels. Should there be a close beneath these figures, it may trigger a move towards the crucial daily demand at the $100,000 area.

On the on-chain analysis front, the whale ratio on exchanges has surged past 0.55, marking its highest level in over a year. This metric, indicating the ratio of top 10 inflows to total inflows, often acts as a red flag. Historically, when this measure rises, it implies that large holders may be preparing to sell, leading to potential price corrections or increased volatility, especially when retail activity appears stagnant.

In conjunction with the current price stagnation beneath vital resistance, the existing whale activity hints at cautious distribution rather than aggressive accumulation. If this elevated whale ratio persists while Bitcoin trades sideways or dips, it supports the scenario for a liquidity sweep below the $100,000 mark before any chance of upward movement.

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