Bitcoin tests key breakout level as liquidity pressure builds above 109K

🔍 Key Levels and Current Structure

Bitcoin is once again approaching a pivotal moment on the daily chart, as price action flirts with the upper boundary of a long-standing consolidation channel. After defending the lower trendline near $104K, BTC has steadily climbed to retest the breakout zone around $108.5K–$109K. The structure remains technically bullish, with higher lows forming consistently and volume stabilizing just below key resistance.

At this stage, price is compressing within a narrowing triangle, showing a battle between bullish momentum and lingering resistance from previous local tops. The EMAs are beginning to align in a supportive fashion, and the Stochastic RSI remains elevated in bullish territory. However, confirmation is still required for a decisive breakout toward the $112K–$115K zone.

📊 Key Levels:

🔴 Resistance Levels:

• $108,500 – Short-term resistance (top of current structure)
• $110,200 – High-volume node from March
• $112,300 – Local yearly high and breakout target

🟢 Support Levels:

• $106,000 – Confluence with EMA 50
• $104,000 – Previous demand zone
• $100,600 – Weekly structural support

📈 Moving Averages:

• EMA 9 & 12: Showing bullish crossover
• EMA 50: Currently supporting structure at $104K
• EMA 200: Rising steadily, acting as macro trend confirmation
• EMA 300 & SMA 300: Long-term strength above $89K–$91K zone

📊 Market Liquidity (Coinglass Map):

The liquidation heatmap from Coinglass reveals a massive liquidity cluster between $109K and $111K, indicating that many short positions are vulnerable if BTC manages to push above the current range. This creates a highly bullish setup where a sudden breakout could trigger a short squeeze and fast upward movement.

Notably, the downside liquidity under $105K appears relatively weaker, meaning any rejection would likely result in slower descent unless panic selling is triggered.

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📉 Exchange Supply is Shrinking Fast

According to Santiment, the supply of BTC on centralized exchanges has dropped to its lowest point since early 2021. The chart shows a dramatic decline from above 1.45M BTC in May to just under 1.22M at the end of June 2025.

This sharp reduction in available supply suggests that a significant portion of Bitcoin has been moved to cold wallets or custody solutions, likely by institutional investors and long-term holders. Historically, this behavior precedes major upward moves, as reduced selling pressure tends to amplify volatility when demand spikes.

The price (green line) has been gradually recovering in parallel with this supply drop (red line), hinting at a bullish divergence supported by fundamentals.

This on-chain trend aligns with the technical structure: fewer coins on exchanges mean less immediate sell pressure, increasing the probability that a breakout above $109K could be sustained.

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🚀 Bullish Scenario

If Bitcoin manages to break above $109K with conviction and strong volume, the resulting move could be explosive. The cluster of liquidations between $109K and $112K would likely get wiped out quickly, propelling price toward the next psychological barrier at $115K.

🎯 Long Entry: Break and retest above $109,200
📍 Stop-loss: Below $106,200 (under previous rejection)
🎯 Targets:

• $111,800 (liquidity zone)
• $114,900 (Fibonacci extension)
  📊 Probability: 65% if volume confirms and open interest spikes

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📉 Bearish Scenario

Failure to reclaim $109K resistance could lead to another rejection back to the mid-range. If the price slips under the $106K level, the bullish structure would begin to deteriorate, especially if accompanied by increased exchange inflows.

🔻 Short Entry: Rejection from $109K with bearish engulfing candle
📍 Stop-loss: Above $110,000
🔻 Targets:

• $104,000 (support test)
• $100,600 (macro trendline)
  📊 Probability: 35% without strong bearish catalyst

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📌 Best Strategy: Wait for Confirmation

This is a critical phase for BTC. While many signs point to bullish momentum — such as EMA alignment, liquidity traps above, and decreasing exchange supply — the breakout is not yet confirmed. Patience is key.

🧐 What to Watch in the Coming Days?
📈 Confirmation of a daily candle close above $109K
💰 Spot inflows or outflows from major exchanges
🔄 Potential fakeout and reclaim traps

Investors should also monitor funding rates and derivatives positioning closely. If leverage builds up again on the long side, the breakout could face stronger resistance.

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Source of the Chart: TradingView & Coinglass

On-chain data: Santiment (BTC Exchange Supply Decline)

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📜 Disclaimer

This analysis is for informational and educational purposes only and should not be considered financial advice. Trading and investing in cryptocurrencies involve a high level of risk, and past performance is not indicative of future results. Always conduct your own research and consult with a professional financial advisor before making any investment decisions. The information provided here reflects market conditions at the time of writing and may change without notice. Neither the author nor this platform is responsible for any financial losses incurred as a result of trading decisions based on this analysis.