Bitcoin Faces Bearish Pressure After $110,500 Peak

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Bitcoin recently surged to an impressive high of $110,500, marking a pivotal moment in its 2025 price journey. While the milestone reignited bullish sentiment across the crypto market, signs of underlying weakness are emerging. Technical indicators across multiple timeframes are flashing caution signals, suggesting that the rally may be losing steam. Despite the optimism surrounding Bitcoin’s all-time high approach, bearish divergences, lukewarm funding rates, and growing sell-side pressure point to a potential near-term correction.

Technical Divergences Signal Momentum Fade

One of the most telling signs of weakening momentum is the presence of bearish divergences on key timeframes. On the 15-minute, one-hour, and four-hour charts, Bitcoin’s price continues to climb, but momentum indicators like the Relative Strength Index (RSI) are trending downward. This disconnect—where price makes higher highs while momentum makes lower highs—indicates that buying pressure is diminishing.

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This phenomenon isn’t isolated to short-term charts. A broader bearish divergence first emerged in May on the daily timeframe, coinciding with Bitcoin’s peak at $111,800. Even though BTC briefly dipped below $100,000 afterward, the structural imbalance between price and momentum has remained intact. Historically, such divergences often precede pullbacks or extended consolidation phases, especially after prolonged rallies.

The immediate support zone lies between $107,500 and $106,000. A decisive break below this range could accelerate selling pressure and open the door for a deeper retracement toward $104,000 or lower, depending on market sentiment and macroeconomic triggers.

NFP Data Adds Pressure to Bullish Outlook

Market dynamics were further tested following the release of the latest US Non-Farm Payroll (NFP) report. The data came in hotter than expected, signaling a resilient labor market and potentially delaying Federal Reserve rate cuts. Initially, the strong economic signal provided a boost to risk assets, pushing Bitcoin toward the $110,000 mark.

However, the rally quickly lost traction. Bulls failed to sustain momentum above this key psychological level, resulting in a rejection that reinforced resistance at current highs. In technical analysis, such failed breakouts often indicate exhaustion among buyers and can serve as a precursor to reversal patterns.

The NFP outcome also impacts investor expectations around monetary policy. With inflation still a concern and employment robust, the Fed may maintain a hawkish stance longer than anticipated. This environment tends to weigh on speculative assets like cryptocurrencies, making it harder for Bitcoin to achieve sustained upward movement without strong institutional or macro catalysts.

Neutral Funding Rates Reflect Market Caution

Another critical metric offering insight into trader sentiment is the perpetual futures funding rate. Unlike previous rallies—where aggressive long positioning drove funding rates sharply positive—current levels remain flat. Vetle Lunde of K33 Research highlighted this anomaly on X (formerly Twitter), noting that BTC is nearing all-time highs without triggering enthusiastic long leverage.

This neutrality suggests that traders are approaching the current price zone with caution. Rather than piling into leveraged long positions, many appear to be waiting for confirmation of a true breakout. This behavior aligns with the technical divergences discussed earlier and underscores a lack of conviction in the current rally’s sustainability.

In contrast, extreme funding rates—either highly positive or negative—often signal overcrowded trades and imminent reversals. The current balance implies a more mature market response, possibly reflecting increased participation from institutional players who tend to favor measured entries over speculative frenzy.

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Liquidity Sweeps and Order Book Dynamics

Market structure analysis reveals additional clues about potential next moves. Trader KillaXBT observed a pattern of liquidity sweeps—where price briefly moves beyond key resistance or support levels only to reverse sharply. These moves often target stop-loss orders clustered around technical levels, effectively “flushing out” weak hands before a directional breakout.

In recent sessions, liquidity has been taken above $110,000 and below key support zones, followed by swift reversals. This behavior is typical in mature markets and suggests that large players may be manipulating short-term price action to accumulate positions at favorable prices.

Additionally, order books are showing increased sell-side volume around the $110,000 region. A cluster of high-taker sell orders indicates that many traders are choosing to exit or hedge positions at this resistance level. This concentration of supply can act as a barrier to further upside unless accompanied by overwhelming buying pressure.

Contradictory Signals: Is a Breakout Still Possible?

Despite the bearish technical setup, some traders remain optimistic. Pseudonymous analyst Byzantine General shared a chart suggesting that open interest in Bitcoin futures is building in alignment with price—a setup that historically precedes strong directional moves. If open interest expands alongside a price breakout above $111,800, it could signal genuine institutional participation and fuel a new leg higher toward $112,000 or beyond.

However, for such a scenario to unfold, several conditions must be met:

Until these factors align, the path of least resistance appears tilted to the downside.

Frequently Asked Questions

Q: What is a bearish divergence in crypto trading?
A: Bearish divergence occurs when an asset’s price reaches a new high, but momentum indicators like RSI or MACD fail to confirm it by making lower highs. This signals weakening buying pressure and potential reversal.

Q: Why did Bitcoin fail to break $110,000 despite strong NFP data?
A: While strong NFP data can boost risk appetite initially, it also suggests delayed rate cuts. Traders may have sold BTC on strength, anticipating tighter monetary policy that could hurt speculative assets.

Q: What does neutral funding rate mean for Bitcoin traders?
A: A neutral funding rate means there’s no excessive leverage on either side. It reflects balanced sentiment and reduces the risk of sharp squeezes—but also suggests lack of conviction in current trends.

Q: How do liquidity sweeps affect Bitcoin’s price?
A: Liquidity sweeps target stop-loss orders around key levels. They can create fakeouts but often precede real moves by clearing out weak positions before a sustained breakout.

Q: What are the next key support levels if Bitcoin drops?
A: Immediate support lies between $107,500 and $106,000. A break below could lead to tests of $104,000 or $102,000, depending on market conditions.

Q: Can Bitcoin still reach $112,000?
A: Yes—but only with strong volume, rising open interest, and confirmed breakout above $111,800. Until then, caution remains warranted.

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Final Outlook

Bitcoin’s journey to $110,500 was a testament to its enduring appeal as a digital store of value and speculative asset. Yet, technical fragility across multiple indicators suggests that the rally may be entering a vulnerable phase. With bearish divergences persisting from May, neutral funding rates, and increasing sell-side pressure near resistance, the odds favor a pullback over an immediate new all-time high.

That said, crypto markets are inherently volatile and prone to sudden shifts driven by macro news, regulatory updates, or institutional inflows. Traders should remain vigilant, use tight risk management, and watch for confirmation signals before assuming the next trend direction.

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