Bitcoin's third flop at $110K puts bulls at risk: BTC price levels to watch

Key takeaways:

• Bitcoin’s multiple rejections from $110,000 signal the bulls’ inability to sustain higher prices.

• BTC price may drop as low as $105,000 in the short term if key levels are lost.

Bitcoin ( BTC ) bulls were thwarted in an attempt to regain support at $110,000 on Thursday as US employment data exceeded expectations, dealing a blow to hopes of interest-rate cuts before September. 

This is the third failed attempt since the May all-time high, casting doubt on Bitcoin’s ability to breach $110,000 and enter price discovery again.

BTC/USD four-hour chart. Source: Cointelegraph/ TradingView

Bitcoin price risks  a deeper correction

Historically, multiple rejections near all-time highs have preceded sharp drops in BTC price.

For example, Bitcoin price was rejected multiple times from the $107,000 level in January, just 2% below the previous all-time high above $109,000 reached on Jan. 20. This preceded a 14% price drop over the two weeks that followed.

Related: Bitcoin bull run could peter out in 2-3 months, says analyst

Similarly, BTC price plunged 18% within 10 days following multiple rejections from the $72,000 resistance level, close to the earlier $73,800 record high of March 14, 2024.

BTC/USD charts with past rejections from all-time highs. Source: Cointelegraph/TradingView

If history repeats, the BTC/USD pair will drop 14%-18% from current price levels.

Technical indicators like bearish divergences in the relative strength index, where the price makes higher highs but RSI forms lower highs, reinforce the resistance at $110,000 . 

Additionally, high-taker sell volume around $110,000 and neutral funding rates in futures markets point to profit-taking and hesitation among traders, increasing the likelihood of a pullback.

Key Bitcoin price levels to watch under $110,000

Data from Cointelegraph Markets Pro and TradingView shows Bitcoin price trading at $109,100, as $110,000 remains a key barrier. The BTC/USD pair needs to achieve a clear break above this level to end the multimonth consolidation.  

Above that, there is a major supply zone stretching from $110,000 to $112,000, which the bulls must also overcome to get back into price discovery.

BTC/USD four-hour chart. Source: Cointelegraph/ TradingView

Conversely, the bears will attempt to defend the $110,000 resistance, increasing the likelihood of pulling the price lower.

A key area of interest lies between $107,500, where the 50-day simple moving average (SMA) currently sits, and $106,000, where the 100-day and 200-day SMAs appear to converge.

Another area of interest stretches from the local low at $105,200 (reached on Wednesday) to the $104,000 psychological level.

Pseudonymous trader KillaXBT points out that Bitcoin could see a deeper correction if it loses the support between $108,000 and $107,500 . The trader also said that holding this area would see BTC rally to fresh all-time highs over the next few weeks.

“Hold = I TP my short and aim for a sweep of ATH this month.”

BTC/USD chart. Source: KillaXBT

The BTC/USDT three-day liquidation heatmap shows the biggest liquidity cluster of $121 million, sitting just above $110,000, as per data from CoinGlass .

A short squeeze is therefore in play if the $110,000 level is broken , which could force short sellers to close positions and drive prices toward $114,000.

BTC/USDT three-day liquidation heatmap. Source: CoinGlass

On the downside, heavy bid orders are sitting around $108,000, with the next significant cluster bands in place from $107,700 to $105,000.