Bitcoin at $105K: A Strategic Entry or a Warning Sign?

Bitcoin's recent dip to $105,000 has sparked debate among traders and investors: Is this a fleeting opportunity to accumulate at a discounted price, or an ominous sign of deeper weakness? A blend of technical analysis and macroeconomic trends suggests the former—but with caveats. Let's dissect the data.

Technical Analysis: Support and Resistance in Focus

The $105,000 mark is acting as a battleground between bulls and bears. Immediate support rests at $104,000–$103,000, with a critical psychological floor at $100,000. A breach below $100,000 could trigger a slide toward $93,000, but technical indicators suggest resilience. The 20-day Exponential Moving Average (EMA) at $106,028 remains a key hurdle: Breaking above it would signal renewed bullish momentum, while failure could test lower supports.

The Relative Strength Index (RSI) at 62 places Bitcoin in a neutral zone, far from overbought levels (>70), while the Williams %R at -95.85 indicates extreme oversold conditions—a classic setup for a rebound. A bullish Doji candlestick on the weekly chart further hints at indecision, but not despair.

Macroeconomic Catalysts: ETFs and Money Supply Correlation

Structural trends favor bulls. Bitcoin ETF inflows—despite $267.5M in institutional outflows on June 2—show resilience, with weekly inflows hitting $286M. Spot Bitcoin ETFs added $1.37B weekly, signaling sustained institutional demand. This aligns with Colin's analysis linking Bitcoin's price to the global M2 money supply (offset by 68–76 days). If this correlation holds, Bitcoin could hit $150,000 by August, as central banks flood markets with liquidity.

Meanwhile, on-chain activity bolsters optimism: Daily active addresses rose 15% to 850,000, suggesting organic user growth. The RHODL Ratio—measuring long-term holder accumulation—remains elevated, indicating patient HODLers are not capitulating.

Risks: Regulatory Uncertainty and Bearish Pressures

Bears aren't without ammunition. The MACD line at -639.18 signals bearish momentum, and LLudovit12's analysis warns of a “strongly bearish trend” if Bitcoin fails to clear $106,000–$107,000 resistance. Regulators also loom large: The SEC's delayed rulings on crypto staking and Singapore's compliance deadlines could spook markets.

Geopolitical risks—such as Russia-Ukraine tensions and Israel-Iran conflicts—are simmering but not yet triggering panic selling. The Fear & Greed Index at 57 (“Greed”) reflects cautious optimism, not euphoria.

Investment Thesis: A Long-Term Buy with Caution

The 2.25% drop to $105K appears to be a correction, not a collapse. Bulls have the upper hand if Bitcoin holds $100,000, as this would validate the M2 correlation and ETF inflows. The path to $150K hinges on breaking $106,000–$107,000 resistance, with $107,743 acting as a final gatekeeper.

Historical backtests from 2020 to 2025 confirm this strategy: When the MACD Golden Cross occurred at support levels like $100K–$105K, a 20-day hold delivered a 12.9% compound annual growth rate (CAGR), though with moderate risk-adjusted returns (Sharpe ratio of :0.34). This underscores the potential of such entries to capture bullish momentum while managing risk.

Actionable advice for long-term investors:
1. Dollar-cost average into dips below $106K, targeting entry points near $103K.
2. Avoid overexposure until Bitcoin closes above $107,500.
3. Monitor ETF flows and regulatory headlines—sustained inflows or positive SEC rulings could catalyze a breakout.

Conclusion: Volatility is the Price of Long-Term Gains

Bitcoin's $105K threshold is a testing ground, not a tombstone. Technicals suggest support is holding, macro trends favor liquidity-driven growth, and bears need more than minor dips to derail the narrative. While risks exist, the structural case for Bitcoin as a hedge against inflation and monetary expansion remains intact. For investors with a multi-year horizon, this volatility is a buying opportunity—not a red flag.

Stay vigilant, but stay in the game.