Bitcoin Faces Continued Decline: Technical Analysis Overview
Bitcoin (BTC) has resumed its downward trajectory after failing to hold key support levels, dipping below $105,000 for the first time in a week. Traders are closely monitoring whether the flagship cryptocurrency will find footing above $104,000 or capitulate toward the $100,000 plateau, as several technical indicators flash fresh bearish signals.
Current Price Action and Key Levels
On the hourly chart for BTC/USD (Kraken data feed), Bitcoin traded as low as $104,604 before consolidating near $105,200. The price remains below both the 100-hour simple moving average (SMA) at $106,800 and the 200-hour SMA at $108,200. A descending trend line is intact with resistance at $107,550, coinciding with the 50% Fibonacci retracement of the latest $110,500–$104,604 decline.
Support Levels
- $104,000: Immediate demand zone; breach could trigger algorithmic stop-losses.
- $103,200: Congestion area on the volume profile visible range (VPVR).
- $101,200: 78.6% Fib retracement and 200-hour SMA cluster.
Resistance Levels
- $106,000: 23.6% Fib retracement and short-term VWAP.
- $107,500–$107,550: Converging trend line and 50% Fib level.
- $110,000: Psychological barrier and prior swing high.
Technical Indicators
- MACD (1H): Momentum is increasing in the bearish zone, with the MACD line widening below the signal line.
- RSI (1H): Currently at 42, indicating persistent bearish pressure but not yet in oversold territory.
- On-Balance Volume (OBV): Declining, confirming distribution among holders.
On-Chain Metrics Analysis
On-chain data from Glassnode shows that active addresses have decreased by 8% over the past week, signaling lower trading activity. Meanwhile, the MVRV Z-Score is trending toward neutral, suggesting reduced unrealized profit among long-term holders. Additionally, funding rates on major derivatives exchanges have turned negative, implying that short positions outnumber longs.
Macro Factors and Market Sentiment
Macro-economic headwinds—including rising U.S. Treasury yields and renewed speculation about Federal Reserve rate hikes—have weighed on risk assets, with Bitcoin correlating more closely with equities. The recent U.S. Consumer Price Index (CPI) data came in above expectations, reinforcing a cautious stance among institutional investors awaiting the next Fed meeting minutes.
Expert Commentary
“If BTC fails to reclaim the 100-hour SMA decisively, we could see a drop toward $101,200, where longer-term technical buyers are likely to step in,” says Dr. Elena Kovalski, Senior Analyst at CryptoAnalytics Research.
“We’re also watching on-chain derivatives metrics; a sustained negative funding rate tends to precede deeper corrections in Bitcoin,” adds Michael Liu, Head of Trading at Digital Asset Strategies.
Trading Strategies and Risk Management
- Look for a close above $107,550 on a 1-hour candle to consider scaling back into long positions, with a stop-loss near $105,500.
- Short-sellers might target $104,000 with a stop above $106,000, risking a breakout above the descending trend line.
- Use position sizing and maintain a risk/reward ratio of at least 1:2, given the increased volatility.
Conclusion: Bitcoin’s technical structure remains biased to the downside unless it can break above the $107,500–$107,550 zone. Traders should watch the $104,000 support for signs of breakdown or reversal, while on-chain metrics and macro cues will provide further context to gauge the next major move.