Bitcoin Price Stalls Near $110K

Bitcoin (BTC) price action showed signs of slowing down over the weekend, failing to break through the $110,000 resistance level. This pause comes amidst a significant decrease in whale transaction volume and a cooling Relative Strength Index (RSI).

Bitcoin Rally Pauses Below $110,000

After reaching $109,400 on Sunday, Bitcoin retreated to around $108,000. While the price continues to print higher lows, suggesting bullish consolidation following the recent all-time high above $106,100 on May 20th, the lack of a decisive break above $110,000 is noteworthy.

Data shows five consecutive daily closes above $106,100, indicating strong holder conviction. However, the reduced trading volume is a concern.

At press time, Bitcoin traded in a tight range around $108,200, exhibiting mid-term structural strength.

Low weekend liquidity appears to be hindering Bitcoin's rally. The initial upward momentum was met with rejection at the $110,000 barrier, followed by a decrease in trading volume. 24-hour volume dropped to approximately $26 billion, a significant 70% decrease from Thursday's $75 billion spike.

Whale Transaction Volume Decreases

Data from Coingecko reveals a dramatic drop in Bitcoin whale transaction volume. On May 22nd, whale volume surged to $112.6 billion, the highest daily total in the past month, coinciding with BTC hitting a new all-time high of $110,624. However, this activity quickly reversed.

By May 24th, whale transaction volume plummeted to $48.15 billion—a 57.2% decline in just two days. This sharp decrease mirrors the BTC price drop from $110,000 to $108,200.

This suggests exhaustion amongst large investors following the aggressive price surge between May 20th and 22nd.

The failed attempt to break $110,000 coincides with the decline in whale activity, highlighting the importance of large-scale institutional buying pressure for continued upward momentum.

Bitcoin Price Analysis: RSI and Technical Indicators

The short-term outlook is cautiously optimistic, with the price holding above $106,000, a level now acting as strong support. However, technical momentum is weakening.

The RSI has retreated to 63.39 from recent highs near 74, indicating a loss of aggressive buying pressure. This places BTC in neutral-to-bullish territory, suggesting consolidation rather than an immediate breakout.

The MACD histogram is flattening, and the MACD line is hovering above the signal line, signaling waning bullish momentum but not a reversal. A bullish crossover could reignite upward movement, while further weakness could lead to bearish divergence.

Bitcoin is holding above both the 5-day SMA ($107,856) and the 13-day SMA ($106,216), emphasizing the significance of the $106,000 support zone. A break below this level could trigger further selling pressure.

Volume remains modest, and traders are awaiting stronger inflows before expecting another rally above $110,000.

Frequently Asked Questions (FAQs)

• What is the Bitcoin price forecast? A cautiously bullish trend is expected if support at $106,000 holds and volume recovers.
• Why is Bitcoin facing resistance? A drop in weekend volume and declining whale activity is hindering upside momentum.
• Is the RSI overbought? An RSI near 74 suggests Bitcoin is nearing overbought conditions, potentially leading to short-term consolidation.