Bitcoin’s bounce is hanging by a thread above the critical $111K–$110K demand cluster after a sharp rejection near $118K. A liquidity sweep at the highs flipped into a fast sell-off, and now order flow around the 100-day MA (~$111K) could decide whether BTC stabilizes for a push back to resistance—or slips into the next liquidity pocket below.

What’s Driving Today’s Move

BTC was rejected at the $118K supply, aligning with a broader descending structure. The drop tagged the $111K–$110K demand and tested the 100-day moving average, a level that has repeatedly acted as structural support. On the 4-hour chart, the failed breakout above $117K–$118K left a liquidity sweep signature and accelerated the downside into demand.

Derivatives show funding rates ticking higher again—suggesting buyers are returning—but not at the overheated extremes seen in late 2024. This points to a more balanced backdrop: constructive if BTC holds support, vulnerable if it doesn’t.

Why It Matters for Traders

These levels cluster with liquidity and trend context. Holding above $111K–$110K keeps the broader uptrend intact and sets up a rebound to $115K or a trendline retest. Losing it cleanly risks a swift trip to the next demand/stop pools at $108K–$107K, even $105K. With funding rising, aggressive longs can fuel upside—but also accelerate liquidations if price breaks down.

Key Levels to Watch

• $118K supply: prior liquidity sweep; breakout requires strong spot-led bid.
• $115K resistance: first meaningful retest on bounces.
• $111K–$110K demand + 100D MA: pivot for trend continuation.
• $108K–$107K demand: next liquidity block if $111K fails.
• $105K: deeper magnet if sell-side momentum accelerates.

Actionable Playbook

• Support fade (advanced): If order flow confirms absorption at $111K–$110K (higher lows on 1–4h, declining sell delta), consider a tactical long. Invalidate on a 1h close below $110K. Scale out into $112.8K–$113.6K and $115K.
• Breakdown short: If BTC closes 1–4h below $111K and retests it as resistance, target $108K–$107K. Invalidate on a clean reclaim of $111.6K with rising spot bid.
• Momentum breakout: Only chase above $118.2K if volume is expanding, funding stays moderate, and spot leads perps. Initial targets: prior highs; trail stops aggressively.
• Risk controls: Reduce size if funding turns extreme or OI balloons into resistance. Prefer spot-led bounces; be cautious when perps lead.
• Options hedge: For long portfolios, short-dated protective puts near $108K–$107K can buffer a swift flush without abandoning core exposure.

Sentiment & Risk Flags

Funding is rising but not frothy—healthy if support holds. Watch for a sudden spike in funding and open interest into resistance; that combo often precedes fakeouts and liquidation cascades. Conversely, a grind higher with spot-driven flows and steady funding supports a sustainable reclaim toward $115K and beyond.

Bottom Line

As long as BTC holds the $111K–$110K demand and the 100D MA, the broader uptrend remains intact. Lose it decisively, and the path of least resistance points to $108K–$107K and potentially $105K. Let the level confirm the trade: react to structure, not predictions.

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