Bitcoin Is Reaching New Highs, But These Divergences Signal A Potential Trap

Yesterday, bitcoin briefly crossed $110,500, driven by institutional flows hungry for yield. This momentum immediately rekindled hopes of a new All Time High. But the rally was short-lived. Swiftly rejected below this psychological barrier, BTC left traders in suspense. And everyone started making their predictions about the next big move…

Bitcoin: $110K, the Frontline of the Nerve War

No clear victory, no decisive retreat. The $110,000 level acts as an invisible trench. Here, buyers try to force their way through, while sellers set repeated traps.

Order books reveal a concentration of massive sell orders at this level. A classic tactic to trap overly enthusiastic bulls. As analyst KillaXBT notes: ” First, the short sellers are crushed, twice even, then the buyers are punished. When the market becomes too bullish, that’s when the real reversal begins“.

And it’s no coincidence. Recent history has often shown sharp reversals after such rejections. Market behavior reminds us that, sometimes, psychological levels attract false starts.

Adding to this is the lack of euphoria among speculators: funding rates remain surprisingly flat. According to Vetle Lunde, “ perpetual contracts trade at a lasting discount to spot. No appetite for risk“.

Compressed Spring, Market Under Tension: Watch for the Explosion

The apparent calm masks mounting tension. Technical indicators give the impression of a vice. The Squeeze Momentum Indicator is activated. Translation: volatility is contracting. Like a spring being compressed, 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. Meanwhile, the ADX, the average directional index, sits at 12. This number reveals a lack of a clear trend, often a precursor to a sharp move ahead.

In the same vein, the pseudonymous analyst Byzantine General shared:

Price breakout + rising open interest = often a forthcoming rise. I think $112,000 is coming.

So, bullish recovery or another fake-out? This uncertainty keeps operators in studious caution. Some see it as an opportunity to cool their heels. Others, a silent market warning.

Bitcoin: Technical Indicators Contradict, Traders Hesitate

BTC sails between bullish signals and bearish warnings. Here’s what the numbers tell us:

• RSI in bearish divergence since the ATH: momentum is slowing.
• 7-day average funding rate: only 3.46% annualized.
• Rising Open Interest: a sign that positions are building up, but in which direction?
• EMA 50 above the 200: typically a medium-term bullish setup;
• Massive buyer volume at $110,000, followed by liquidations: classic trapping pattern.

The BTC price shows strength but without real fervor. And traders find themselves torn between ambiguous technical indicators. The price/RSI divergence signals fatigue, but the moving averages alignment remains bullish.

Ethereum and even Bonk, Solana’s joke, seem to be taking advantage of the climate to put on a show. But in the main ring, BTC still commands all attention. Trapped, but always threatening.

In this atmosphere of appearances, bolder predictions surface. Some analysts talk about a BTC ready to turn red towards $117,000. Behind this paradoxical phrase lies a well-known indicator: the Hash Ribbons, which has just flashed again. For insiders, this signal indicates a major bullish return in the short to medium term. Proof that even red alerts can sometimes lead to a green light.