Bitcoin Price Sinks Into ‘Critical Support’ Under $110K in 2% Daily Dip

Bitcoin Falters at Major Resistance, Dips Below $110K

Bitcoin (BTC) is facing renewed selling pressure, with its price taking a significant 2% dip to fall below the crucial $110,000 level. The move came after another failed attempt to conquer the formidable $112,000 resistance zone, leaving investors on edge as the leading cryptocurrency tests a pivotal support area.

The downturn occurred during the Wall Street opening bell, seemingly shrugging off new U.S. jobs data that might have otherwise provided a boost. Despite unemployment numbers pointing to a weakening labor market—a factor that typically increases the odds of Federal Reserve interest rate cuts—Bitcoin’s price trajectory remained firmly pointed downwards. This price action highlights a challenging period for bulls as the market grapples with technical resistance and macroeconomic uncertainty. The recent drop triggered significant market volatility, with reports of over $100 million in liquidations across the crypto market in just one hour.

A Technical Tug-of-War: The Battle for Support

From a technical standpoint, Bitcoin’s chart tells a story of a fierce battle between buyers and sellers. The rejection from the $112,000 area marks the fifth time bulls have been pushed back from this level, solidifying its status as a major hurdle. Analysts are now closely watching how the Bitcoin price sinks into <'critical support'> under $110K, an area identified as a high-volume trading zone that could provide a floor for the current decline.

Several key indicators are flashing warning signs for traders:

• Moving Averages: The 21-day Exponential Moving Average (EMA) is trading below the 55-day EMA, a signal often interpreted as bearish short-term momentum.
• Support Levels: While $110,000 is the immediate focus, a failure to hold this level could open the door to further downside. Traders are eyeing support zones around $109,800 and $108,500. A more significant breakdown could see Bitcoin retesting its triple-lows near $107,000.
• The Bearish Scenario: Some market participants are becoming increasingly cautious, suggesting that losing the $110,000 support could make a slide towards the psychological $100,000 mark highly likely.

However, some optimism remains. A few analysts believe the overhead resistance is thinning and that the current dip could be a liquidity sweep before another attempt at a breakout. For now, the market remains in a state of consolidation, waiting for a decisive move.

Macro Headwinds and Gold’s Shining Moment

The broader economic landscape presents a mixed bag for Bitcoin. While a weakening labor market typically fuels speculation of Fed rate cuts—a positive for risk assets like crypto—the market’s muted reaction suggests other forces are at play. Persistent inflation remains a major concern, with some financial firms warning that the Fed may be facing a “one and done” scenario for rate cuts this year.

Amid this uncertainty, another asset is stealing the spotlight: gold. The precious metal has been on a tear, outperforming both U.S. stocks and cryptocurrencies in the current bull market. Market commentators attribute gold’s breakout to a combination of factors, including investors pricing in higher long-term inflation and concerns over mounting government deficit spending. This trend suggests that in the current climate, some investors are flocking to traditional safe-haven assets over digital ones.

What’s Next for Bitcoin?

Bitcoin is at a critical juncture. Its ability to hold the line at the $110,000 support zone will likely dictate its short-term future. A successful defense could reinvigorate bulls for another assault on the $112,000 resistance. However, a failure to do so could confirm bearish momentum and trigger a deeper correction towards $100,000.

Investors and traders should brace for continued volatility as the market navigates technical pressures, macroeconomic signals, and competition from surging traditional assets like gold. The coming days will be crucial in determining whether this dip is a temporary setback or the start of a more significant downtrend.