BTC Encounters Increased Selling Pressure as $95K Resistance Remains Strong

Bitcoin’s recent upward movement seems to be slowing down, as it faces significant resistance near the $95,000 mark. The market is indicating potential fatigue, hinting that a corrective phase might be imminent before any further attempts to reach new highs.

Technical Analysis

The Daily Chart

Following a robust breakout above both the 100- and 200-day moving averages last week, Bitcoin climbed toward the crucial $95,000 level. This area is recognized as a key technical resistance, not only because of its psychological significance but also due to its alignment with previous swing highs and zones of market interest.

As the price moved closer to this level, bullish momentum began to weaken. The chart now displays a phase of reduced volatility and horizontal consolidation, a classic indicator of uncertainty at strong resistance points.

The RSI has entered overbought territory, suggesting that buying pressure may be diminishing in the short term. These conditions signal the possibility of a pullback, likely heading toward the $90,000 region, where the 100- and 200-day moving averages will serve as dynamic support.

A successful breakout above this barrier would pave the way for Bitcoin to revisit its previous all-time high of $109,000, reinstating a bullish trend in the market.

The 4-Hour Chart

Analyzing the 4-hour chart reveals a likelihood of a brief corrective move. Following a strong rally, Bitcoin’s advance has been capped at the earlier swing high of $95,000, forming a classic three-drives pattern—a common bearish reversal setup that suggests potential selling by informed players at critical price points.

Furthermore, a bearish divergence between the price movement and the RSI indicates declining momentum. Although the chart shows higher highs, the RSI has not mirrored this growth, signaling a possible reduction in buying strength. This divergence, along with substantial resistance around $95,000, implies Bitcoin could be entering a corrective phase.

The most likely outcome in the short term looks to be a retreat toward the $90,000 area, which has now become a crucial support region. If buyers can adequately defend this level, it may create a solid foundation for renewed bullish activity, targeting a breakout beyond $95,000, with $109,000 as the next major goal.

On-chain Analysis

Looking at recent funding rate trends provides valuable insights into the sentiment influencing Bitcoin’s price movements. During an extended correction period from March to October 2024, funding rates fluctuated into negative territory several times, even amidst short-lived price increases.

This trend illustrated a strong presence of short-sellers and a notable lack of confidence among traders, likely reflecting retail investors’ attempts to manage exposure or hedge against potential declines.

Currently, a nearly identical trend is starting to unfold. As Bitcoin’s price approached the key $95,000 resistance, funding rates again turned negative. This disparity between rising prices and falling funding rates suggests that a significant portion of participants are either:

• Protecting against potential declines, anticipating a bearish reversal at resistance,
• Or distributing their holdings, selling into perceived strength to mitigate risk.

This behavioral trend often precedes short-term pullbacks, as heightened caution or contrarian strategies can temporarily disrupt the supply-demand dynamics. Given this context, a short-term bearish retracement seems plausible. If historical patterns prevail, such a pullback could eventually be constructive for the overall bullish framework.