Bitcoin narrowly holds steady above $106,000 as recovery momentum remains thin
Bitcoin's price remains under pressure, hovering just above $106,000 after recent volatility prompted by heavy selling from major holders and fallout from earlier liquidations triggered by Donald Trump’s tariff announcement. Key technical resistance at the 200-day moving average near $110,000 hinders rebound potential, while the market mood is sluggish with low trading activity, falling futures interest, and weak ETF inflows. Overall, Bitcoin has lost around $340 billion in market value, trailing gold and tech stocks significantly. Analysts warn of fragile support levels near $103,000, with potential further drops to $86,000 or $82,000 if breached, while a recovery above $110,000 could signal renewed upward momentum.
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Bitcoin's Volatile Price Movements
Bitcoin is hovering just above $106,000 today after briefly hitting $107,000 on Monday, only to slide back under $105,000. This volatility follows a wave of selling by major holders and lingering effects of the October 10th liquidations, which were triggered by Donald Trump’s surprise tariff announcement. That event caused a significant meltdown across the crypto markets.
Decline in Trading Activity and Investor Sentiment
Trading activity has reflected the sluggish tone, with open interest on Bitcoin futures dropping to around $68 billion, down from $94 billion last month—a significant decline in investor appetite. Additionally, funding rates are flat, suggesting a lack of interest in leveraging positions. Meanwhile, US-listed Bitcoin ETFs only saw net inflows of $1 million on Monday, despite equities and credit markets gaining momentum after Washington’s decision to end the federal shutdown.
Technical Analysis: Key Levels and Market Sentiment
From a technical perspective, Bitcoin remains stuck below the critical 200-day moving average at around $110,000, a level traders believe is crucial for a bullish reversal. Since early October, Bitcoin has lost about $340 billion in market value. Despite some yearly gains, Bitcoin continues to underperform compared to gold and tech stocks, drawing attention from high-speed investors seeking better trends. George Mandres, senior trader at XBTO Trading, described the current situation as a dead cat bounce, citing large-scale selling by whales, weak ETF inflows, and pressure from crypto treasury firms as reasons for crushed sentiment.
Correlation with Risk Assets Shows Uncertainty
Momentum traders also see little hope. Tony Sycamore, an analyst at IG Australia, observed that Bitcoin’s price mirrored the recent rebound in risk assets, though this correlation had previously decoupled. He argued that the correction from the $126,272 top to the recent $98,898 low may have ended. However, breaking above the 200-day moving average near $110,000 would provide stronger confirmation of this trend reversal.
Resistance and Key Levels in the Broader Crypto Market
The broader crypto market cap slipped 1.1% on Monday after an earlier rally stalled at $3.6 trillion, with resistance holding near the 50-day average of $3.62 trillion. Alex Kuptsikevich, chief market analyst at FxPro, cautioned that another short-term top might be forming, noting, "We’re still in a downtrend, and reduced corporate buying is noticeable."
Future Prospects and Key Supports for Bitcoin
Rachael Lucas, an analyst at BTC Markets, characterized Bitcoin's recent rally as a short-covering bounce combined with some institutional fear of missing out (FOMO). She highlighted Bitcoin’s rebound from its 50-week SMA at around $103,000 after briefly touching $98,900. If momentum continues, the next resistance levels are at $110,400, $115,600, and potentially $118,000. However, failure to hold above $103,000 could lead to declines toward $86,000, with deeper support at $82,000, near the 100-week moving average. Rachael warned that slipping below these levels could trigger another wave of significant selling.