Bitcoin’s meteoric rise to $112,000 has hit a potential inflection point as key technical indicators signal trend exhaustion. The leading cryptocurrency is now testing critical support levels while traders debate whether this marks a healthy reset or the start of a deeper correction.
Currently hovering above $105,000, Bitcoin’s Average Directional Index (ADX) has dropped to monthly lows, suggesting the powerful uptrend that dominated recent weeks may be losing steam. This technical development comes as bulls fight to defend the crucial $105,000 support level that could determine BTC’s next major move.
Technical Analysis Shows Weakening Momentum
Fresh data from CryptoQuant reveals the ADX has fallen to its lowest reading in over a month on hourly timeframes. This decline suggests the strong bullish momentum that carried Bitcoin to new heights is fading. However, significant whale accumulation continues despite the price consolidation, indicating strong hands are using this period to accumulate.
Critical Support and Resistance Levels
Key technical levels to watch:
- Strong support: $103,600
- Secondary support: $100,000 (psychological)
- Key resistance: $109,300
- All-time high: $112,000
Market Implications and Next Moves
The current setup presents two likely scenarios:
- A successful defense of $103,600 could fuel a rebound toward previous highs
- A breakdown below support might trigger a deeper correction toward the 100-day SMA at $92,094
Frequently Asked Questions
What does the ADX indicator tell us about Bitcoin’s trend?
The ADX measures trend strength, with readings below 20 indicating weak trends. The current drop suggests momentum is waning, but doesn’t necessarily predict direction.
Could this lead to a major correction?
While possible, strong institutional support and whale accumulation suggest any dips may be limited and could present buying opportunities.
What are the key levels to watch?
The immediate focus is on the $103,600 support level. A daily close below this could trigger increased selling pressure.
As global markets navigate uncertain waters, Bitcoin’s next move could set the tone for the broader crypto market. Traders should maintain strict risk management while watching for volume confirmation of any breakout or breakdown.