Bitcoin Faces Resistance at $108,800 as Bearish Signals Emerge

Bitcoin's recent rally has encountered significant resistance, with bearish signals emerging that could potentially halt its upward trajectory. On June 30th, Bitcoin hit a strong resistance level at $108,800, marking a critical juncture for the cryptocurrency. Despite managing to erase most of the downside from the ongoing rout in US stock markets, Bitcoin's price has shown signs of struggle, indicating that the celebration of its recent gains may be short-lived.

One of the key warning signs is a bearish crossover on the Stochastic RSI, typically an indicator of fading buying pressure and a shift toward bearish momentum. Market data also shows the RSI pulling back from overbought territory, reinforcing expectations that bulls may be running out of strength. Unless BTC can rally above $109,000 with strong volume and hold that level, a downward move looks increasingly likely.

Social interest data reveal an alarming trend in this crypto cycle. Bitcoin has touched $107,000, setting new all-time highs, but the underlying sentiment suggests that the market may be nearing a peak. The daily Relative Strength Index (RSI) for Bitcoin climbed out of the oversold zone around mid-June, with the RSI indicator finally leaving sub-30 readings on June 23rd. This signals that bearish momentum may be building, as the RSI has been above 70 since April 2024, indicating overbought conditions.

Analyst Lenaert Snyder noted Bitcoin’s rejection near $108,600 and pointed to a potential support zone between $101,000 and $103,000. He also suggested the market might need a shakeout to reset overextended long positions before any sustainable rebound. With July underway, Bitcoin’s ability to either recover lost ground or slide further could hinge on how it reacts near these key technical levels.

Analysts have predicted that Bitcoin could hit $130,000 within 90 days, hinging on sustained institutional inflows and a breakout above $115,000. However, the current $90,000 defense level is critical for stability, as miner whales' $58,000 break-even price historically signals bear cycles. The volatility in Bitcoin's price has intensified, with the potential for a clear reversal pattern to emerge, which could turn the outlook bearish.

The bullish case for Bitcoin, with a 60% probability, relies on several factors, including sustained institutional inflows and a breakout above $115,000. However, the current market conditions suggest that these factors may not be enough to sustain the rally. The monthly RSI has been above 70 since April 2024, indicating overbought conditions and a potential for a correction.

In summary, while Bitcoin has shown impressive gains recently, the emergence of bearish signals suggests that the rally may be hitting a wall. The strong resistance at $108,800, the overbought conditions indicated by the RSI, and the potential for a clear reversal pattern all point to a potential correction in the near future. Investors should remain cautious and monitor the market closely for any signs of a reversal.