Key Takeaways:

• Bitcoin’s price action is hovering near significant support levels around $104,450, with traders closely watching the $105,000 mark for a potential breakout.

• RSI divergence on the weekly chart raises concerns that Bitcoin’s bullish momentum could be waning, potentially leading to a pullback.

• Fibonacci retracement levels indicate two critical fair value gaps at $97,000 and $90,000, which may act as key support zones if Bitcoin experiences a correction.

• Psychological price levels such as $100,000 could play a crucial role in Bitcoin’s short-term price action. Traders are looking for a retest of this level to gauge whether the uptrend will continue.

• Long-term support at $84,000 remains a key price point, with liquidity and bullish market structure supporting the overall positive outlook for Bitcoin.

BTC/USD At A Critical Juncture

As BTC/USD attempts to break the $105,000 barrier, the market is seeing a mix of bullish and bearish signals that could dictate its next big move.

BTC/USD Hourly Chart

Source: TradingView

One of the most significant points of support lies around the local top from December 17th, 2024, when Bitcoin reached approximately $104,450. This price point continues to play a pivotal role in the current market structure.

Key Market Indicators To Watch

As Bitcoin navigates these critical price levels, several key indicators are shaping the market sentiment:

1. RSI Divergence: Traders are keeping an eye on the bearish divergence between BTC’s price and the RSI on weekly charts. This could indicate a potential reversal or cooling off in price action.

2. Fibonacci Levels and Fair Value Gaps: Price levels around $97,000 and $90,000 are significant for potential retracement zones. These fair value gaps show imbalances in buying and selling pressure and may offer insight into where BTC’s price could head next.

3. Psychological Price Levels: The $100,000 mark is a key psychological barrier that traders are watching closely. A retest of this level could determine whether BTC will maintain its bullish momentum or experience a deeper pullback.

4. Support at $84,000: In the long-term, the support level at $84,000 remains a crucial price point. As liquidity rises in this region, it could act as a strong foundation for future upward movements.

Divergence & Bearish Signals: A Word Of Caution

‘Titan of Crypto’ pointed out that the bearish divergence on the weekly RSI chart could have significant implications for the bullish outlook. Titan warned that while the divergence remains unconfirmed, it’s worth keeping a close eye on the situation.

The trader also referenced Fibonacci retracement levels and noted two major fair value gaps (FVGs) to watch, one around $97,000 and another at $90,000. These price levels indicate potential areas of imbalance between buyers and sellers, which may come into play if BTC experiences a pullback.

Support Levels: Can $100,000 Hold?

Looking at order book liquidity data, the $100,000 level could serve as a psychological support zone if Bitcoin’s price continues to dip.

Bitcoin Liquidity Chart

Source: X (@CrypNuevo)

Despite the recent 8% drop in BTC’s price over the past week, traders remains optimistic about the larger market structure. Even a slight temporary drop below the $100K mark could make sense to shake out the market, but the overall trend remains bullish.

FAQ

Why is the $100,000 level so significant for Bitcoin?

The $100,000 level is considered a strong psychological barrier for traders and investors. As a round number, it tends to attract both buying and selling activity, making it a key support or resistance point.

Additionally, order book liquidity often stacks around significant psychological levels, which can impact price action.

What is an RSI bearish divergence, and why does it matter?

RSI divergence occurs when the price of an asset moves in the opposite direction of the RSI, signaling a potential shift in momentum.

In this case, a bearish divergence suggests that even as BTC’s price rises, the momentum behind the move is weakening, which could signal an impending price correction.