Bitcoin Drops 0.5% Amid Volatility, Faces Resistance at $110,600

Bitcoin's price has been experiencing a period of volatility, with the cryptocurrency trading around $109,000, down 0.5% on the day. The price briefly broke out of a multi-week symmetrical triangle but faced resistance just below $110,600, a level that aligns with key Fibonacci and supply resistance. Despite the broader bullish structure, intraday indicators show signs of short-term exhaustion and divergence.

On the daily chart, Bitcoin's price recently breached the descending triangle resistance near $108,000, which had capped upside since early June. The breakout was clean but met heavy supply pressure just under $111,000. The move still keeps BTC above the key trendline, suggesting structural strength. However, candles are now consolidating at the edge of the breakout zone, indicating indecision.

The rejection near $110,590 corresponds with the 0.0 Fibonacci level from the latest 1H swing, while the 0.236 retracement near $109,299 is currently acting as short-term resistance. A sustained move above this level is required to maintain upward pressure. The broader ascending parallel channel from late June remains intact, and BTC is currently hovering near the midline. The key support at $108,000 also coincides with the lower Bollinger Band on the 4H chart and EMA50.

The current downward trend in Bitcoin's price can be attributed to a cluster of bearish divergences and weakening momentum across multiple timeframes. On the 30-minute chart, the Relative Strength Index (RSI) has formed two lower highs while the price made higher highs, indicating a clear bearish divergence. The RSI is now trending below 37, indicating weakening strength. Simultaneously, the Moving Average Convergence Divergence (MACD) on the same timeframe shows a bearish crossover with widening histogram bars, confirming downside momentum.

On the 4-hour chart, the Supertrend indicator remains bullish but is narrowing, suggesting a potential flip if $108,500 is breached. The Directional Movement Index (DMI) shows -DI overtaking +DI, with the Average Directional Index (ADX) near 18, reflecting weak trend strength and potential for a short-term reversal.

Derivative metrics also echo the caution. Despite rising open interest, 24-hour volume is down by 21.47%, and options volume has dropped 13.74%, signaling reduced speculative activity. The funding rate remains slightly positive at 0.0035%, hinting at a marginal long bias but far from aggressive positioning.

On the 4H chart, Bitcoin's price action is hugging the upper Bollinger Band but has started to turn inward. This contraction, paired with declining candle body size and a lack of follow-through above $110K, increases the likelihood of a volatility compression event. Price is also reacting to the EMA20/50/100 cluster between $106,800 and $108,500. If BTC closes below this band, bears could press for a retest of lower channel support near $106,000. On the upside, reclaiming $109,300 with volume confirmation would reassert bullish control and could invite a fresh wave of breakout buyers.

Bitcoin price volatility is expected to remain elevated over the next 24 hours. The key pivot is the $108,500 level — if this area breaks, downside targets include the 0.5 and 0.618 Fibonacci zones at $107,854 and $107,209, respectively. These levels also align with previous intraday consolidation zones, making them critical for bulls to defend. Conversely, a clean push above $109,300 could revive momentum toward $110,600 and the R3 pivot resistance near $110,826. If that is cleared, BTC could accelerate toward R4 near $113,266, but the path remains steep. Traders should watch the $108,000–$109,300 band closely for directional resolution.