Bitcoin News Today: Bitcoin's Descent Tests $100K: A Bull Trap or Buying Opportunity?

Bitcoin has recently retreated below the $110,000 level, triggering growing concerns among investors and analysts following a sharp price correction. The cryptocurrency, which had reached a record high of over $124,000 in early August, has since dropped nearly 12%, reaching a seven-week low near $108,700 [2]. This move has raised the possibility of a potential bull trap, where an initial rally is followed by a sharp reversal, potentially catching investors off guard [2]. The recent pullback has seen Bitcoin break through multiple key technical levels, including the descending channel and the 100-day moving average, signaling a bearish shift in market sentiment [1].

Technical indicators have also reinforced the bearish bias, with the relative strength index (RSI) falling below 50 and showing signs of waning buying momentum [1]. On the 4-hour chart, Bitcoin has formed a consistent downtrend, with lower highs and lower lows within a descending channel, reinforcing the likelihood of a continuation of the decline [1]. Key support levels, such as $107,000 and $100,000, are now under pressure, with the latter aligning with the 200-day moving average and a potential accumulation zone for investors [2].

The broader market context has also contributed to the recent decline. The comments from Federal Reserve Chair Jerome Powell, which hinted at the possibility of an interest rate cut, led to a reversal of the previous week’s gains [2]. Additionally, reports of increased liquidations among large investors and rising outflows from Bitcoin ETFs have added to the downward pressure [2]. These factors suggest that macroeconomic conditions and shifting risk appetite are playing a key role in the current price action.

On-chain data also provides mixed signals. Exchange reserves—the amount of Bitcoin held on trading platforms—have been on a steady decline since early 2024, indicating a growing preference among investors and institutions to move their holdings into cold storage [1]. While this trend typically supports higher prices in the long run by reducing circulating supply, it does not necessarily insulate Bitcoin from short-term corrections, especially during periods of weak demand or macroeconomic uncertainty [1].

Analysts are closely watching the $104,000 level, which coincides with a fair value gap and the 78.6% Fibonacci retracement level. A breakdown below this threshold could expose the next key support area near the psychological $100,000 mark [1]. Resistance levels at $117,000 and $123,000 remain in focus, with the former posing a potential barrier to a near-term recovery [2]. The way Bitcoin reacts to these levels will likely determine the near-term trajectory of the market.

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