Bitcoin’s price has edged back above the $110,000 mark, but analysts caution that the broader market remains fragile as trading volumes and investor confidence weaken.
Modest Recovery Amid Fragile Market Structure
Bitcoin rose 2.4% in the past 24 hours to trade around $110,000, bouncing off Monday’s low of $107,300. Despite the rebound, on-chain data from Glassnode suggested that demand in both spot and futures markets was weakening, pointing to a defensive stance among traders.
BTC/USD daily chart.
According to Glassnode’s Weekly Market Pulse report, spot trading volume fell by 9% to $7.7 billion from $8.5 billion. The firm said the decline reflected “waning investor participation” and “weaker conviction” as traders remained cautious following recent volatility.
Futures Traders Reduce Exposure
The futures market showed similar restraint. Open interest dropped slightly to $45 billion from $45.8 billion, while futures funding rates declined to $2.8 billion from $3.8 billion. Analysts said this indicated reduced demand for leverage and an unwillingness to maintain costly long positions.
“Traders appear less willing to extend risk, underscoring a defensive stance after recent volatility,” Glassnode noted. Institutional demand has also faded, reaching its lowest point since early April.
Key Levels to Watch for Bitcoin Price
Bitcoin is currently facing resistance at $110,500, the upper boundary of a descending parallel channel. A daily close above this level could signal a breakout, with the next target between $110,000 and $117,000, an area reinforced by the 50-day and 100-day simple moving averages.
On the downside, support lies at $108,000 and Monday’s low of $107,300, followed by the lower boundary of the channel at $105,300. If these levels fail, Bitcoin could slip towards the psychological support of $100,000.
Analysts Call for Break Above $112K
Michael van de Poppe, founder of MN Capital, said a “clear break” above $112,000 would be needed to open the path to new all-time highs. “Otherwise, I’d be looking at $103Kish for a great opportunity,” he added.
Bitcoin liquidation map. Source: CoinGlass
Other analysts highlighted liquidity zones as key short-term drivers. Data showed clusters of liquidity between $110,000 and $111,000, and another significant band between $105,500 and $107,000. Such levels often act as magnets for price movement.
Liquidity Hunt Underway
Analyst AlphaBTC suggested Bitcoin is currently engaged in a “liquidity hunt.” In a post on X, they argued that the market could first test the shorts clustered between $110,000 and $111,000 before dropping back to sweep liquidity around recent lows.
For bulls, reclaiming the 20-day exponential moving average at $112,500 remains critical. Failure to do so would raise the risk of a deeper correction towards $105,000 and potentially $100,000.
