Bitcoin is grinding above $110,000 even as BitMine’s Tom Lee reminds the market that Bitcoin is not immune to a 50% drawdown. Under the hood, activity is intense: on-chain perpetuals just printed a record month, exchange flows are ticking up on dips, and leverage is building. The next battle zone between $108k–$114k could set the tone for the next leg—breakout or breakdown—so traders should be preparing plans, not predictions.

What’s Happening Right Now

BTC trades near $111,331 (+~1% 24h) while spot volume slipped ~31% to $50.47B. Price is consolidating after a run to ~$126k and a fast fade below $110k before bouncing. On-chain, October saw >$1T in notional traded on perpetuals built directly on-chain—evidence of robust risk-taking—while exchange transfers rose during selloffs, hinting at profit-taking and loss-limiting behavior.

Why It Matters For Traders

- Elevated on-chain perps + rising exchange inflows into dips = fragile leverage. Big moves can cascade if key levels fail. - Institutional participation doesn’t erase downside. As Lee notes, BTC can still suffer deep drawdowns during liquidity shocks.

Key Levels And Scenarios

- Support: $108,000 (near the 200D SMA ~ $108,446), then $105,000. - Resistance: $114,200 (near the 50D SMA ~ $114,195), then $118,000, with supply at $125k–$126k. - Indicators: RSI ~47 (neutral), MACD below signal (bearish tilt), ADX ~25 (trend present but not dominant).

On-Chain Signals To Watch

- Exchange netflows: spikes on red days signal supply hitting markets. - Funding rates and open interest: rising together into resistance raises squeeze risk. - Spot vs perp premium: spot leading is healthier; perp-led ramps can unwind quickly.

Actionable Trade Plan

• Range approach: Consider fading extremes within $108k–$114k. Buy wicks toward $108.4k–$105k with tight invalidation below $104.5k; trim into $114.2k/$118k.
• Breakout momentum: Wait for a 4H close above $118k with rising spot volume and cooling funding; target a move toward $125k–$126k. Invalidate on reclaim back below $114k.
• Fade rejections: If price stalls at $114.2k/$118k with bearish divergence, a tactical short can target $110k then $108k, stop above local highs (e.g., $118.5k).

Risk Management You Can’t Skip

• Cap per-trade risk at 0.5–1.5% of equity; size positions to your stop, not your conviction.
• Avoid high leverage while ADX ~25; trend is fragile and prone to whipsaws.
• Use options to hedge breakdown risk: protective puts around $105k or put spreads if $108k fails.
• Stand down around major macro prints or sudden funding/oi spikes—these often precede liquidation cascades.

Bottom Line

BTC is stable but vulnerable: a sustained hold above $108k keeps the range intact; a reclaim of $118k opens a path to retest highs. Lose the 200D SMA, and Lee’s warning about sharp drawdowns moves front and center. Trade the levels, monitor leverage, and let confirmation—not hope—be your trigger.

If you don't want to miss any crypto news, follow my account on X.