BTC risks a bigger correction if this key metric remains weak

Bitcoin continues to struggle after the massive selloff earlier this month. Market optimism has cooled and BTC consolidates near $111,000 as traders remain cautious.

Technical analysis

By Shayan

The daily chart

On the daily chart, BTC sits just above key support around $110,000, which is the critical 200-day moving average, while the 200-day moving average acts as resistance above the price around $116,000.

The $110,000 area remains critical, and a decisive breakout could send the market towards $101,000 and the lower boundary of the large descending channel. Meanwhile, the RSI around 42 signals neutral momentum, reflecting the hesitation of both bulls and bears. Unless Bitcoin reclaims $116,000 with significant volume, the broader uptrend risks losing its medium-term structure.

The 4-hour chart

The 4-hour chart highlights a tight consolidation between $110,000 and $116,000 after a strong downward impulse. The $110,000 range continues to be an area of ​​demand, but repeated testing has weakened its reliability.

Resistance lies at $116,000, as already mentioned, which has capped every recovery attempt over the past few days. The RSI also remains steady near 40, indicating equilibrium on a 4-hour time frame, but the lack of momentum suggests the market could collapse if sellers regain control.

Sentiment Analysis

Term Open Interest

Open interest on exchanges declined sharply following the recent sell-off, reflecting a sharp reduction in speculative activity. Traders are avoiding aggressive positions after being liquidated during the last downward move.

This drop in leverage shows that the market is resetting, but it also signals a lack of conviction in a strong near-term bullish continuation. Investor confidence remains fragile, with fear outweighing greed, and most participants waiting for stronger confirmation before reinvesting in long positions.