Bitcoin's $105K Support and RSI Break: A Catalyst for $110K Rebound?

The Bitcoin price narrative in late 2025 has been a tug-of-war between technical optimism and macroeconomic uncertainty. With the asset consolidating near $87,000 after a 30% correction from its October peak of $126,000, the question of whether $105,000 can act as a catalyst for a $110,000 rebound hinges on the convergence of technical indicators and macroeconomic catalysts. This analysis explores the interplay between Bitcoin's RSI dynamics, institutional positioning, and global monetary policy shifts to assess the viability of a near-term bullish case.

Technical Indicators: RSI Breakouts and Structural Support

Bitcoin's Relative Strength Index (RSI) has emerged as a critical focal point for bulls. A weekly RSI breakout in December 2025, as highlighted by trader BitBull, suggests a potential price rebound toward $103,000–$105,000 within 3–4 weeks. On the four-hour timeframe, a hidden bullish divergence in RSI indicates weakening sell-side pressure as Bitcoin consolidates around the $90,000 support zone. This divergence, coupled with a daily close above $95,000, could retest the $100,000–$105,000 resistance band.

Structural support at $80,000–$82,000 remains intact, with on-chain data from Checkonchain revealing a redistribution of Bitcoin supply and reduced leverage, signaling a period of consolidation rather than a leveraged rally. While Bitcoin remains below the $98,000–$105,000 resistance band, the 2-Year Simple Moving Average at $82,800 is a critical level to watch. A close below this line could trigger a deeper bearish phase, but a sustained rebound above $95,000 could reignite institutional demand.

Macroeconomic Catalysts: Fed Rate Cuts and BOJ Tightening

The Federal Reserve's December 2025 rate cut of 25 basis points, bringing the target range to 3.50-3.75%, has injected liquidity into risk assets. However, the Fed's hawkish forward guidance and elevated correlations with traditional markets have limited Bitcoin's appeal as a safe-haven asset. Meanwhile, the Bank of Japan's anticipated tightening poses a dual-edged sword. A 25-basis-point rate hike by the BOJ could unwind the yen carry trade, historically linked to Bitcoin's price declines of 23%, 26%, and 31% following previous hikes in 2024 and 2025.

The macroeconomic environment remains fragmented. U.S. inflation surprised to the downside with a 2.7% annual CPI reading, while November nonfarm payrolls exceeded expectations, creating indecision around the Fed's 2026 rate-cutting cycle. This uncertainty has kept Bitcoin's correlation with equities in neutral territory, with capital flows favoring traditional markets over crypto. The Crypto Fear & Greed Index, hovering near 21, underscores the market's bearish sentiment.

Convergence of Technical and Macro Factors

The convergence of technical and macroeconomic factors creates a nuanced outlook. While Bitcoin's RSI and support levels suggest a potential rebound, macroeconomic headwinds-such as high real yields and geopolitical tensions-pose risks. Institutional demand, however, remains a wildcard. Digital asset treasuries and long-only ETFs have absorbed significant supply without triggering panic lows, and on-chain data reveals signs of capitulation among weak holders while large investors accumulate.

A bullish case for $110,000 requires a three-day RSI divergence and institutional inflows in early January. The Fed's dovish pivot in 2026 could further support Bitcoin, but the BOJ's tightening remains a critical risk. If Bitcoin closes above $95,000 and holds the $82,800 SMA, it could retest $100,000–$105,000. However, a breakdown below $88,000 could drag the price toward $70,000.

Conclusion: A High-Probability, Low-Confidence Scenario

Bitcoin's $105,000 support level and RSI breakout present a compelling case for a $110,000 rebound, but the path is fraught with macroeconomic volatility. The Fed's rate cuts and potential institutional inflows offer tailwinds, while the BOJ's tightening and elevated real yields pose headwinds. Investors must balance technical signals with macroeconomic risks, as the market's structural strength-driven by corporate treasuries and sovereign holdings-suggests a floor for Bitcoin's price. For now, the $80,000–$85,000 range remains a critical battleground, with the outcome hinging on the resolution of global liquidity dynamics and regulatory clarity in 2026.