Bitcoin Drops 2% After Failed Breakout Attempt

Bitcoin's price has been fluctuating around $108,050 after a volatile 24 hours, struggling to regain its footing following a sharp rejection from the $110,950 zone. Despite the broader bullish trend over the month, short-term charts indicate fatigue as buyers failed to sustain the recent highs. The focus now is on whether Bitcoin can stabilize above key support zones or if further downside is imminent before the next breakout.

The latest Bitcoin price action reveals a failed breakout attempt above the upper Bollinger Band, followed by a rapid drop to the midline and a temporary bounce from intraday support around $107,400. The 30-minute and 4-hour charts show a significant sell-off candle on May 23, triggering a bearish engulfing pattern just after Bitcoin briefly tested the $111,000 area. This drawdown occurred despite a strong upward channel visible on the 4-hour timeframe since May 7. The price is now testing the median line of that rising channel, signaling a critical moment for bulls. If this support fails, a deeper retracement toward $105,900 may occur.

On the 4-hour chart, the Bitcoin price has dipped below the 20-EMA ($108,753) and is now testing the 50-EMA ($106,934) as short-term support. This zone also overlaps with the middle Bollinger Band ($109,405), which recently flipped from support to resistance, indicating pressure from the upper bands. The trendline support from May 7 is still intact but under threat. Should the price break below $106,800, a move toward $104,200, where the 100-EMA lies, may be seen. On the upside, immediate resistance stands near $110,000 and then $112,800, where previous supply zones rejected price action.

Momentum tools are starting to reflect bearish divergence. On the 30-minute RSI, readings are slipping below 45, with no clear signs of reversal yet. Meanwhile, the MACD histogram has flipped red with the signal line crossing below the MACD line, confirming the weakness seen on price charts. The Ichimoku Cloud on lower timeframes shows that Bitcoin is trading below the Tenkan and Kijun lines and beneath the cloud, indicating short-term trend exhaustion. However, the cloud remains thin ahead, suggesting limited resistance if bulls regain strength. Stochastic RSI is flashing overbought signals on the 30-minute chart, with a bearish crossover near the 80 mark, warning that any bounce could face immediate rejection if volume fails to confirm.

The path for the Bitcoin price update depends heavily on how price reacts to the $106,900–$107,300 demand zone. If bulls defend it convincingly, the rebound could retarget $109,800 and $111,000. A failure to hold will open the door for a slide toward the $104,000–$105,000 cluster. The Bitcoin price volatility remains elevated as traders assess whether this is a healthy pullback or a sign of deeper rotation. The next 12–24 hours are crucial for trend confirmation as Bitcoin tests structural mid-channel support and battles for control at $108K.