Bitcoin’s $107K Support Test: Breakdown Risks Deeper Correction

Bitcoin’s price has retreated below critical support levels, prompting analysts to scrutinize the $107,000 threshold as a potential floor and the $112,000 level as a decisive resistance point for short-term momentum. The cryptocurrency fell over 3% this week to $111,590, breaking through the 50- and 100-day simple moving averages (SMA), which have flattened for the first time since April, signaling caution for bulls Bitcoin Buy the Dip Calls Surge but Liquidity Trends Point to USD107K as Potential Magnet^[1]. Social media sentiment, while bullish, is viewed as a contrarian indicator. Santiment’s analysis notes a surge in “buy the dip” mentions—a 30-day high—suggesting retail optimism but warning that crowd-driven optimism often precedes deeper corrections Bitcoin Buy the Dip Calls Surge but Liquidity Trends Point to USD107K as Potential Magnet^[1].

Liquidity analysis underscores the significance of $107,000. Hyblock Capital identified this level as the deepest liquidity cluster, where concentrated buy/sell orders could magnetize price action. Such liquidity pools can stabilize prices by absorbing supply and demand, while traders often place buy orders near these levels, creating self-reinforcing support Bitcoin Buy the Dip Calls Surge but Liquidity Trends Point to USD107K as Potential Magnet^[1]. Smaller but growing liquidity clusters at $109,000 and $111,000 further highlight the market’s focus on these price ranges.

Technical indicators paint a mixed picture. Bitcoin is currently trading near $106,400, hovering less than 5% below its all-time high of $111,900. The asset is locked in a descending channel, with $107,000 as immediate resistance and $100,000 as critical support. A breakout above $107,000 could trigger a rally toward $112,000, while a sustained drop below $100,000 risks a deeper correction to $92,000 Bitcoin Tests $107K As Bulls Eye Breakout To $112K^[2]. On-chain data remains supportive, with ETF inflows and exchange outflows hinting at institutional accumulation, though profit-taking and macroeconomic uncertainty temper short-term optimism Bitcoin Tests $107K As Bulls Eye Breakout To $112K^[2].

Analysts emphasize the pivotal role of $107,000 in determining Bitcoin’s near-term trajectory. The Moon Show’s analysis highlights a bearish divergence on the 4-hour RSI and a rising wedge pattern on the daily chart, both suggesting increased risk of a move toward $100,000 if support fails . Conversely, a rebound above $112,000 could reignite bullish momentum, with bulls aiming to reclaim the all-time high. The weekly chart also shows overbought conditions and bearish divergence, amplifying the likelihood of a deeper correction if short-term resistance is not validated .

Market participants are closely monitoring on-chain activity and liquidity dynamics. Santiment’s contrarian signal framework warns that sustained retail optimism may lead to forced selling at a loss, creating opportunities for contrarian buyers once sentiment shifts Bitcoin Buy the Dip Calls Surge but Liquidity Trends Point to USD107K as Potential Magnet^[1]. Meanwhile, Hyblock Capital’s liquidity analysis suggests that traders are positioning for both a potential bounce at $107,000 and a test of lower support levels, reflecting the market’s cautious stance Bitcoin Buy the Dip Calls Surge but Liquidity Trends Point to USD107K as Potential Magnet^[1].

The broader cryptocurrency market remains in a state of consolidation. Ethereum, for instance, struggles to reclaim the $2,500–$2,550 resistance zone, with mixed momentum indicators and whale activity raising pullback risks Bitcoin Tests $107K As Bulls Eye Breakout To $112K^[2]. However, Bitcoin’s technical setup is seen as a bellwether for the sector, with its ability to hold key levels potentially influencing risk appetite across the crypto market.

As Bitcoin approaches a critical inflection point, analysts urge traders to watch for confirmation signals at $107,000 and $112,000. A decisive close above $107,000 could signal renewed bullish momentum, while a breakdown below $100,000 would likely invite further downward pressure. With macroeconomic uncertainties persisting and liquidity dynamics shifting, the next few weeks will be crucial in determining whether Bitcoin resumes its uptrend or enters a more prolonged correction phase.