Bitcoin Surges 10% to $110,500 on Institutional Interest, Faces Sell Wall

Bitcoin's recent price action has been marked by a brief surge to $110,500, driven by institutional interest seeking yield. This upward momentum briefly reignited hopes for a new all-time high, but the rally was short-lived as the cryptocurrency was swiftly rejected below this psychological barrier, leaving traders in a state of uncertainty. The $110,000 level has become a strategic battleground between buyers and sellers, with order books revealing a concentration of massive sell orders at this level. This tactic is designed to trap overly enthusiastic bulls, as noted by analyst KillaXBT, who observed that short sellers are initially crushed, only for buyers to be punished later, signaling a potential reversal when the market becomes too bullish.

Historical market behavior supports this observation, with sharp reversals often following such rejections. The lack of euphoria among speculators is evident in the funding rates, which remain surprisingly flat. According to Vetle Lunde, perpetual contracts trade at a lasting discount to spot, indicating a lack of appetite for risk. This calm exterior masks mounting tension, as technical indicators suggest a market under pressure. The Squeeze Momentum Indicator is activated, signaling that volatility is contracting like a spring ready to explode. On the daily chart, the Relative Strength Index (RSI) holds at 60, a neutral ground that leaves room for a push without overheating. The Average Directional Index (ADX) sits at 12, revealing a lack of a clear trend, often a precursor to a sharp move ahead.

The pseudonymous analyst Byzantine General shared insights, noting that a price breakout combined with rising open interest often signals a forthcoming rise, predicting that $112,000 could be the next target. However, this uncertainty keeps operators in a state of cautious observation. Some see it as an opportunity to cool their heels, while others view it as a silent market warning. Bitcoin's price action is characterized by a mix of bullish signals and bearish warnings. The RSI shows a bearish divergence since the all-time high, indicating slowing momentum. The 7-day average funding rate stands at only 3.46% annualized, while rising open interest suggests that positions are building up, though the direction remains unclear. The 50-day Exponential Moving Average (EMA) is above the 200-day EMA, typically a medium-term bullish setup, but massive buyer volume at $110,000 followed by liquidations indicates a classic trapping pattern.

Despite these mixed signals, Bitcoin's price shows strength without real fervor, leaving traders torn between ambiguous technical indicators. The price/RSI divergence signals fatigue, but the alignment of moving averages remains bullish. In this atmosphere of appearances, bolder predictions surface. Some analysts talk about a Bitcoin ready to turn red, referring to the Hash Ribbons indicator, which has just flashed again. For insiders, this signal indicates a major bullish return in the short to medium term, proving that even red alerts can sometimes lead to a green light. Ethereum and other cryptocurrencies like Bonk and Solana seem to be taking advantage of the climate to put on a show, but in the main ring, Bitcoin still commands all attention, trapped but always threatening.