Bitcoin is tiptoeing along a fault line. A textbook bear flag on the daily chart is squeezing price action between conviction and capitulation — and the next daily close could decide whether BTC accelerates toward the high $80Ks or snaps back above $111K. With momentum cooling and key on-chain levels under pressure, traders face a binary setup where execution and timing matter more than opinions.

What the charts are signaling

After bottoming near $103,530 on Oct. 11, Bitcoin has been grinding higher inside a parallel channel — the classic “flag” following a sharp drop. The flag’s support has been repeatedly tested around $107,500. A daily close below that zone would validate the pattern and open a measured move toward roughly $88,100.

Momentum backs the bears: the daily RSI sits near 42, indicating sellers hold an edge. On the 4-hour chart, a similar setup projects a drop toward $98,000 — a potential short-term reaction area if tested. From the all-time high above $126,000, BTC is down about 13.6%, placing price in a vulnerable mid-trend retracement.

Why this matters to traders

BTC slipped below the short-term holders’ cost basis at roughly $113,100 — a level that historically marks the onset of mid-term bearish phases as weak hands capitulate. Glassnode’s Supply Quantiles Cost Basis Model shows bulls need to defend the 0.85 quantile at around $108,600. Losing it has previously preceded deeper corrections toward the 0.75 quantile, now near $97,500.

In short: the market is at a structural pivot. Hold above the quantile band and the “bear flag” risks fade; lose it and range support becomes a trap door.

The levels that matter

• $111,000: Short-term pivot. A break-and-hold above shifts bias back to the upside.
• $108,600 (0.85 quantile): Structural defense. Sustained acceptance above stabilizes the trend.
• $107,000–$107,500: Flag support. A daily close below validates the bear flag.
• $100,000: Psychological round number; often attracts liquidity and reactive flows.
• $98,000: 4h target and bounce candidate; loss of this opens the door to $97,500.
• $97,500: 0.75 quantile; failure here increases risk of the full measured move to $88,100.

Actionable trading playbook

• Trade the close, not the wick: Use the daily close relative to $107,000–$107,500 to confirm or negate the bear flag before committing size.
• Define invalidation: For shorts initiated on a confirmed break, consider invalidation on a reclaim and hold back above $108,600 or intraday back inside the flag.
• Scale tactics: If price flushes, scale bids at $100K → $98K → $97.5K with tight invalidations, aiming for reactionary bounces.
• Hedge instead of exit: Long-biased investors can use short-dated puts or bear put spreads into confirmation; roll or reduce if $111K is reclaimed.
• Alert the tape: Set alerts at $108.6K, $107K, $100K, $98K, and $97.5K. Let levels dictate action.

Risk signals to monitor

• RSI behavior: Continued drift below 40 on the daily reinforces downside momentum; a strong reclaim above 50 weakens the bear case.
• Spot vs. perp: Spot-led selloffs with rising negative funding favor trend continuation; spot absorption with declining OI hints at seller exhaustion.
• Order book liquidity: Watch for spoofing near $108.6K and $107K. Genuine bids that don’t pull on tests improve bounce odds.
• Macro correlation: Equities weakness has been leaking into crypto. A risk-on turn in stocks could be the catalyst for a BTC reclaim above $111K.

Bottom line

This is a level-to-level market. The simplest, most repeatable edge is to let the daily close around $107K–$107.5K and the defense of $108.6K decide your bias, then execute with predefined invalidations. One clean confirmation is worth more than five predictions.

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