Bitcoin Drops 5% After Failing to Surpass $110,500 Resistance

Bitcoin's price experienced a sudden decline, falling below the $105,500 mark after failing to surpass the $110,500 resistance zone. This drop led to a test of the $103,000 support level, with a low point recorded at $103,078. The cryptocurrency is currently consolidating losses below the 23.6% Fibonacci retracement level of the recent decline from $110,273 to $103,078.

Bitcoin is now trading below the $105,500 level and the 100-hour simple moving average. A key bearish trend line is forming with resistance at $106,600 on the hourly chart of the BTC/USD pair. Immediate resistance is near the $104,200 level, with the first key resistance at $105,500. The next significant resistance could be at $106,600 and the 50% Fibonacci retracement level of the recent decline.

A close above the $106,600 resistance might propel the price higher, potentially testing the $108,000 resistance level and even reaching towards the $110,000 mark. However, if Bitcoin fails to rise above the $105,500 resistance zone, it could initiate another decline. Immediate support is near the $103,000 level, with the first major support at $102,350. Further losses might push the price towards the $101,500 zone and potentially the $100,500 support in the near term. The main support sits at $100,000, below which BTC might gain bearish momentum.

Technical indicators suggest that the hourly MACD is gaining pace in the bearish zone, while the hourly RSI for BTC/USD is now below the 50 level. Major support levels are at $103,000 and $102,350, with major resistance levels at $104,200 and $105,500. The sudden correction in Bitcoin's price is likely due to profit-taking, as investors lock in gains following the recent rally. This profit-taking has sparked a sell-off, leading to the sharp decline in Bitcoin's price.

Analysts had predicted that Bitcoin's price could face resistance at the $110,500 level, and the failure to surpass this mark has led to the current correction. The cryptocurrency market is known for its volatility, and sudden corrections are not uncommon. However, the current decline in Bitcoin's price serves as a reminder of the risks associated with investing in cryptocurrencies. Investors should exercise caution and conduct thorough research before making any investment decisions.