Bitcoin demonstrates steady growth as it approaches the $110,000 mark. However, experts caution about a potential false breakout at $105,000 amidst rising optimism and macroeconomic influences.
Likelihood of False Breakout at $105,000
Bitcoin recently reached a record high of $109,240, surpassing a $2 trillion valuation. Yet, there may be a trap at the $105,000 level.
This level often corresponds with high liquidity and the 50-day exponential moving average. Trader CrypNuevo notes:
> “The main liquidation level is at $105.2k. A false breakout towards this area, in conjunction with the 1D50EMA, would be a good entry point.”
Such movements in the market can lead to the liquidation of overconfident buyers.
Historic Highs and Macroeconomic Factors
Bitcoin's recent rise indicates a new price discovery territory. Technical signals confirm that buyers are in control. Macroeconomic conditions also boost this growth. Ryan Lee, chief analyst at Bitget Research, highlights:
> “The rise of Bitcoin, reaching around $109,000, is supported by strong favorable macroeconomic winds, including record performances of U.S. stocks.”
This creates perfect conditions for risk-taking investments but signals inherent dangers.
Liquidity Issues and Market Sentiment Changes
Despite Bitcoin's ongoing price increase, the derivatives markets present mixed signals. A decline in funding rates on Binance reflects growing skepticism among traders expecting a price reversal. This misalignment opens the door for a potential *short squeeze*. In this environment, short sellers risk substantial losses if Bitcoin breaks above $110,000 forcefully.
The Fear & Greed Index also warns of extreme greed among investors, signaling a potential short-term market peak. Typically, such atmospheres precede sharp rallies after final shakeouts, and the $105,000 level could serve that purpose.
Bitcoin stands on the brink of a new all-time high, yet the market remains uncertain. Close attention to technical signals and the macroeconomic context is crucial to avoid potential losses.
