This week saw Bitcoin’s stunning surge carry on, with the cryptocurrency for a moment nudging up to—and almost touching—$111,900 on several of the major exchanges before, uh, it kind of didn’t and came back down to earth, looking somewhat dazed and triggering what some are calling a fresh sell signal.

Overall, the digital asset still seems to be in a bullish uptrend, but there are now some signs that it’s getting tired. Traders are closely watching key support levels to see whether this is a standard sort of retest or the beginning of a larger correction.

The market finds itself in a critical situation, where pricing, liquidation, and investor sentiment are all doing their part to create an increasingly tense short-term outlook.

Bitcoin Rally Pauses After $5K Surge: A Sell Signal Emerges

The latest leg upward for Bitcoin started at about $106,300, where a buy alert lighted a fire under the rally that tacked on more than $5,000 to its price. That uptrend finished in a surge to $111,950, making for a new local high. But not long after reaching that point did a sell alert get triggered, suggesting that the buyers may have been running on fumes and that the rally was losing upward momentum.

As this is being penned, Bitcoin trades at about $110,402 on the BTC/USDT pair offered by Binance. The SuperTrend indicator is still green. However, it now sits at a make-or-break level that could swing in the opposite direction if downward pressure on the price continues.

On May 22 (ET), spot Bitcoin ETFs saw a total net inflow of $935 million, marking seven consecutive days of net inflows. Spot Ethereum ETFs recorded a total net inflow of $111 million, with five consecutive days of net inflows.https://t.co/ueXcZjub6m

— Wu Blockchain (@WuBlockchain) May 23, 2025

This hesitation comes in the face of heightened activity from sellers, who are starting to probe the recent structural bullishness. Despite the long-term uptrend being quite intact, the rejection at $111.9K signals that the bulls may be contending with either profit-taking from previous longs or some kind of institutional rebalancing.

Liquidation Zones Signal Key Pressure Points

Analyzing liquidation data also provides better insight into how the market might be moving. When looking at the resistance side, there’s a very clear short liquidation zone from about $111,800 to $112,300. Not only is this area a little thin in terms of order book depth, but it’s also effectively the last line of defense for all those fortunate enough to have opened short positions recently. If the buyers truly are stepping up, then a move through this zone could very well trigger a short squeeze and push Bitcoin beyond the $112,500 mark, which many analysts see as a potential breakout level.

Support areas are now taking center stage. The next long liquidation cluster is at about $110,000 to $109,200. If this area holds and doesn’t get pushed through to the downside, it might very well set the stage for a next bullish push and reinforce the kind of confidence you need for breakouts and pushes to the next higher high.

Beneath that, the territory between $108,000 and $106,300 marks the original base of the current upswing. It also serves as a supply zone, where above it, buyers step in with more confidence. If prices tumble below this range, it’s highly probable that we’d see a serious trend breakdown, with this area serving as a tipping point—and not a very good one at that, given how close it is to current price levels.

Bitcoin just tapped $111.9K before stalling, and a fresh sell signal has now emerged at the top. Is this a standard retest of support or the first crack in bullish momentum? SuperTrend remains green, but sellers are probing.

Full liquidation and trend breakdown below

… https://t.co/MpjTUzsPcR pic.twitter.com/JnEFRyb7BU

— IT Tech (@IT_Tech_PL) May 23, 2025

The $109,200 level could see serious volume profile action and market reaction. A strong bounce there could reset bullish sentiment in the crypto market. But a breakdown might induce overleverage long liquidations to cascade downward.

Sentiment Still Positive, But Cracks Are Forming

Even in the face of short-term ambiguity, the general outlook stays relatively positive. On May 22, spot Bitcoin ETFs took in a net of $935 million—an amount that marked the seventh straight day of positive inflows. That brings the total net inflow for Bitcoin ETFs in 2023 to more than $1.5 billion. Notably, this institutional demand has largely sidestepped the kind of pronounced sell-offs that have characterized previous bear markets.

Yet, how markets feel about an asset can change in the blink of an eye. The recent rejection of Bitcoin’s price at $111,900 may turn out to be just a small, local dip on the way up, but some analysts are interpreting it as a sign of market exhaustion, at least in the short term.

They’re saying that if the $110K level can’t hold as a support level, then the next likely prices in play for a retracement are $108,000 or $106,000—both of which got significant play from bulls late last year and early this year.

To sum up, Bitcoin’s uptrend remains in place, but the market is entering a precarious phase. As long as it maintains a price higher than $110,000, a retest of $112,000 and perhaps even loftier levels remain within striking distance. But if sellers can force the price down to $109,000 or below, a more significant correction seems likely to follow.

Like any otherwise in volatile markets, everything remains concentrated on volume, liquidation activity, and structural support to divine the next move in Bitcoin’s by-now-familiar saga.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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Filed under: Bitcoin - @ May 24, 2025 6:28 am