Bitcoin Price Struggles Below $110,000 as Whale Activity Declines and RSI Signals Caution

Bitcoin’s recent price dynamics reveal a complex picture as it struggles to maintain upward momentum, retreating to approximately $108,200 on Sunday. This decline comes after the cryptocurrency briefly peaked at around $109,400, falling short of the critical $110,000 resistance level. Analysts believe two primary factors are contributing to the hesitation in advancing towards a new bull run: overbought conditions indicated by the Relative Strength Index (RSI) and a significant decrease in trading volume among large cryptocurrency holders, often referred to as “whales.”

In the past few days, Bitcoin’s rally has come to a standstill below the $110,000 mark, attempting to consolidate after reaching an all-time high of $106,100 on May 20. Despite this retreat, Bitcoin’s price has consistently established higher lows, suggesting a robust, albeit cautious bullish sentiment among investors. The analysis from CoinGecko indicates that Bitcoin has successfully maintained five consecutive daily closes above the formidable $108,000 threshold, a strong indicator that most investors who acquired their positions prior to the recent peak are unwilling to liquidate their holdings at current prices.

The latest trading session on Sunday opened with a positive trajectory, yet it fizzled out quickly as the day progressed, accentuated by low weekend liquidity. With total trading volume plunging to around $26 billion, nearly 70% lower than Thursday’s substantial volume of approximately $75 billion that propelled Bitcoin prices to record highs, the impact on market sentiment has been palpable.

In a concerning trend, Bitcoin whale transactions experienced a stark decline of approximately 57.5%, compounding worries surrounding market exhaustion as prices hovered near the $110,000 barrier. Just two days prior, Bitcoin had set a new all-time high at $110,624, accompanied by an impressive spike in whale volumes to about $112.6 billion—the highest level recorded in the past month. However, by May 23, whale transaction volume plummeted to approximately $88.5 billion and further nosedived to $48.15 billion by May 24, reflecting a significant waning in market activity.

This downturn in whale activity coincides with a broader price correction that has seen Bitcoin retreat from its peak around $110,000 to just above $108,000. The decrease in whale transactions illustrates potential exhaustion among large holders of Bitcoin, particularly following the bullish surge observed from May 20 to 22, when total transaction volumes surged from $73 billion to $112.6 billion, driving the BTC price upward.

Simultaneously, market observers note that the failure to breach the $110,000 barrier amplifies concerns over the dependency on institutional buyers, including companies like MicroStrategy and Metaplanet, and the anticipated Bitcoin ETFs, to sustain upward price momentum. Should the whale participation continue to fall below the 30-day moving average volume, currently around $73 billion, Bitcoin could face a retest of its significant support zones between $106,000 and $107,000 before making another attempt at breaking out of its current range.

The analysis surrounding Bitcoin’s price trajectory suggests a cautiously optimistic outlook, with stability observed above the $106,000 support level, which has become increasingly vital following the rejection experienced near $112,000. However, the technical indicators paint a mixed picture. The RSI has reverted to approximately 63.88 from recent highs around 74, implying a cooling off of the market that could contribute to sideways price movement rather than an imminent breakout.

In addition, the MACD histogram is flattening, while the MACD line remains just above the signal line, signaling a decrease in bullish momentum. Nonetheless, there hasn’t been a definitive shift towards bearishness at this stage. Bitcoin currently maintains above the 5-day and 13-day simple moving averages, underscoring the strategic importance of holding above the $106,000 mark. A daily close below this threshold could pave the way for further declines toward the $104,000 to $105,000 range, where previous breakout points and moving averages converge, offering a potential buffer against deeper market corrections.

Trading activity remains subdued, with Bitcoin shifting around 14,030 BTC in volume, as investors await stronger inflows to rekindle bullish momentum and push prices beyond the critical $110,000 psychological barrier. The stage appears set for a potential rebound or continued consolidation, depending largely on the re-engagement of larger market participants and institutional investors in the coming weeks. Overall, the cryptocurrency market is at a critical juncture, navigating complex dynamics as it seeks to redefine its bullish trajectory amid fluctuating whale activity and changing market sentiment.