BTC Correction Risk Persists Despite Recent Rally Pushes
Bitcoin’s (BTC) recent upward trajectory faces significant resistance, casting doubt on the sustainability of its current gains and raising the possibility of a correction towards the $100,000 level by year-end.
- Bitcoin faces strong resistance near $106,000–$108,000, risking a drop toward $100,000.
- Weekly RSI divergence points to a deeper correction.
- Rising Net Unrealized Profit/Loss (NUPL) signals increased profit-taking, echoing pre-correction phases.
Bitcoin Sideways Trading amid Rally Doubts
Bitcoin has traded sideways within a narrow $500 range since reaching its all-time high of $112,000 on May 22. The absence of sustained upside momentum over the past three weeks is fueling questions about the strength of the current rally.
Failed Resistance Test Sparks Concern
Bitcoin is flirting with downside volatility after failing to maintain bullish gains above the critical $106,000 resistance zone. Market analyst Michaël van de Poppe highlighted this level’s importance for sustaining upward momentum.
Analysts point to chart data showing that BTC’s recent rally attempt encountered almost immediate rejection upon testing $106,000. This triggered a cascade of liquidations and pushed the price back towards $104,000–$105,000 territory.
The failure to hold above this level echoes an earlier structure that preceded a sharp drop toward $100,000. If BTC loses the $105,000 support again, a revisit to the $100,000 liquidity pool could occur by June, potentially presenting a buying opportunity according to some analysts, should the market aim to clear leveraged longs.
Bearish Weekly Divergence Toppled
Adding a layer of short-term bearish bias to the technical picture, Bitcoin’s weekly chart is flashing a classic bearish divergence signal.
While the price has formed higher highs, the associated Relative Strength Index (RSI) has carved out lower highs. This disconnect between price action and momentum suggests diminishing bullish force.
This technical pattern often precedes significant trend reversals or deep pullbacks. Historically, it foreshadowed tops in 2021 and mid-2019. If the historical precedent holds, BTC could retrace back towards its 50-week EMA, currently situated near $85,000.
This level has frequently served as crucial support during prior bull markets, positioning it as a likely target for a mid-cycle correction.
Rising NUPL Indicates Profit Taking
Alongside the RSI divergence and persistent failed breakouts, Bitcoin’s Net Unrealized Profit/Loss (NUPL) metric reinforces the case for short-term caution.
As of June 14, the NUPL index was nearing the 0.5–0.6 zone, a level historically correlated with local market tops. This suggests a growing cohort of holders sitting on profits, potentially increasing the likelihood of upcoming sell pressure. This profile mirrors that seen in 2017 and 2021 just prior to sharp declines, heightening the potential for a similar pullback in 2025.
This article is for informational purposes only and does not contain investment advice or recommendations. Every investment and trading move involves risk. Readers should conduct their own research before making any decisions.
