Bitcoin Struggles to Break $110,000 Barrier Amid Investor Diversification

Bitcoin, the world’s largest cryptocurrency by market cap, has struggled to sustainably break through the $110,000 barrier despite a year of significant bullish momentum. After reaching an all-time high of $111,700 in May, Bitcoin has been confined to a tight range between $103,000 and $108,000. This has left investors puzzled, especially considering the backdrop of institutional adoption, record inflows into exchange-traded funds (ETFs), and favorable macroeconomic conditions.

Michael Bucella, the managing partner of Neoclassical Capital, expects Bitcoin to remain within this range for some time. At the time of writing, Bitcoin was trading just under $108,000. Bucella attributes this stagnation to several factors, including risk substitution. Some investors are opting for proxies like Coinbase, Circle, or Bitcoin treasury companies instead of directly investing in Bitcoin. These firms, bolstered by the stablecoin boom and AI-adjacent narratives, have become alternative vehicles for crypto exposure, diverting capital that might otherwise flow into Bitcoin.

From a technical standpoint, Bitcoin shows signs of fatigue. Experts point to a wedge formation on the hourly chart, with repeated rejections just below $110,000. Short interest is rising, and open interest is declining, classic signals of a potential soft reversal. The $106,000 level has emerged as a critical support zone; a break below it could trigger a deeper correction. Adding to the pressure are Bitcoin miners, many of whom are operating on razor-thin margins and have begun liquidating holdings to stay afloat. This miner-driven supply is quietly weighing on the market, even as demand remains robust.

Whale activity has also declined, with a significant drop in whale volume over a recent two-day span coinciding with Bitcoin’s failure to breach $110,000. The Relative Strength Index (RSI) has cooled from overbought levels, suggesting waning momentum. Bitcoin’s identity crisis may also be contributing to its stalled ascent. During geopolitical flare-ups, such as recent tensions, Bitcoin sold off rather than acting as a safe haven. This behavior has led some to question its role as digital gold, suggesting that investors might prefer traditional assets like the S&P 500.

Bucella argues that Bitcoin’s correlation with other assets depends on the timeframe and context. He points to the surge in demand from sovereign and institutional treasuries as evidence of its continued appeal. However, for Bitcoin to decisively break above $110,000, it may need more than macro tailwinds and ETF flows. It needs a narrative reset—one that reaffirms its role as both a hard asset and a growth vehicle. Until then, the $110,000 ceiling remains a stubborn test of conviction.