Bitcoin Pushes Into Downtrend: 106k Reclaimed, 108k–111k Is the Test

Executive Summary

• Bitcoin rebounds to the 106k area as risk appetite improves on signs the U.S. shutdown could end, and equity futures stabilize; dollar softness helps high-beta assets.
• The 4-hour chart shows a clean impulse off 101.4k with price now pressing a multi-week descending trendline and the 200% Fibonacci extension at 106.7k; 108.4k–111.1k is a heavy resistance cluster.
• Momentum has turned positive (PPO > 0, ROC firming) and Bollinger bandwidth is expanding, but money flow is only mid-range—bulls need a decisive close above the trendline to avoid a fade.
• Base case: constructive while above 104.1k–103.0k (VWAP/WMA/Fibo support); a rejection at the trendline risks a pullback to 104.1k/103.0k before another attempt higher.

Market Overview

Bitcoin’s bounce at the start of the week fits the broader risk tone. Headlines over the last 24 hours have pointed to progress in Washington toward funding the government and ending the record shutdown. That mix has nudged U.S. equity futures higher and tempered the dollar’s safe-haven bid. When the dollar eases and equities stabilize, crypto beta typically breathes—particularly after a sharp drawdown.

Two policy threads are also shaping sentiment. First, the Federal Reserve’s recent communication tilted hawkish on the threshold for additional easing, but the market continues to treat incoming labor signals as pivotal for December odds. With the shutdown having delayed some official releases, traders leaned on private-sector datapoints that hinted at softer hiring and layoffs in tech and retail. That cocktail lowered yields late last week, adding a tailwind to long-duration, liquidity-sensitive assets—crypto among them.

Second, the China–U.S. technology backdrop remains tense (curbs to high-end AI chip sales), which has been a headwind at times for semis and broad risk. Yet the incremental improvement in the political outlook around the shutdown and the sense that the Fed will avoid pre-committing further cuts allows a relief rotation into cyclicals and high beta. Bitcoin’s weekend rebound extended on Monday under that macro umbrella.

For crypto micro-dynamics, positioning matters. The drawdown through late October and early November flushed leverage, as evidenced by thinner weekend wicks and smaller liquidation prints. With funding normalized and spot demand re-emerging near 100k–102k, the path of least resistance into overhead technical levels was higher—until proven otherwise by trendline supply.

Put simply: the macro tape turned less hostile, dollar strength cooled, and a positioned-lighter market had room to squeeze upward. The question now is whether price can convert the first major resistance shelf into support; failure there would reinforce that the medium-term downtrend remains in control.

Technical Analysis

Current technical conditions and main scenario

The 4-hour chart shows BTCUSD reclaiming the mid-Bollinger band and riding the upper band in an impulsive leg from the 101,370-swing low. Price now trades near 106,400–106,500, pressing into a confluence of resistance:

A multi-week descending trendline connecting the mid-October lower highs crosses 107k–108k on this timeframe.

The 200% Fibonacci extension of the most recent 101,370 → 104,054 rally projects to 106,738, almost exactly where intraday progress has stalled.

Just overhead sits a dense extension cluster at 108,396 (261.8%) and 111,080 (361.8%), lining up with the underside of the broader down-channel.

Market structure since the 101,370 pivot is constructive: higher lows, higher highs, and orderly pullbacks that found buyers near the 100% extension (104,054) and the 20-period WMA (~105,600 on the chart).

Volume on advances has improved modestly relative to the late-October slide, and Bollinger bandwidth is expanding from depressed levels—typical of a trend expansion phase rather than mean-reversion chop.

Base case: while 104,054–103,028 holds on closing bases (the 100% and 61.8% retracement/swing supports), probability favors a further squeeze toward the 108,396–111,080 resistance band. A decisive 4-hour close above the descending trendline plus acceptance above 106,738 would signal that supply is being absorbed. That would open 108,396 first, then 110k–111,080, where risk-reward likely flips again in favor of counter-trend sellers unless momentum accelerates.

What would constitute “decisive”? Two things: (1) a 4-hour close above 106,740–107,000 that also holds the subsequent retest (former resistance acting as support), and (2) PPO maintaining a positive slope with ROC staying above zero during the retest. If those conditions print, the odds of extension into 108.4k and 110–111k rise meaningfully.

Oscillators and breadth

Percentage Price Oscillator (PPO) has crossed above the signal line and is climbing; histogram bars are positive. That shift confirms that the latest impulse isn’t merely a volatility pop. However, PPO isn’t stretched—there’s fuel for continuation if price can clear the trendline.

Money Flow Index sits around the mid-50s, reflecting improving, but not euphoric, inflows. This aligns with the “advance but verify” stance: bulls have traction, yet there’s no blow-off.

Rate of Change has flipped positive from a deeply negative regime in late October and is attempting to hold above zero. Sustained ROC > 0 during any pullback will be an important tell that the up-leg remains constructive.

Bollinger Band behavior supports the momentum case: price is riding the upper band with bands widening after a narrow phase; that argues for trend continuation rather than an immediate reversion, unless upper band tags are rejected back inside quickly with rising sell volume.

Key levels

Upside resistance:

• 106,738: 200% Fibonacci extension of the 101,370 → 104,054 impulse; first serious test now.
• 107,000–108,000: descending trendline zone from mid-October; clearing and holding above turns the regime from “sell rallies” to “buy dips” on this timeframe.
• 108,396: 261.8% extension; a magnet if trendline breaks.
• 110,000–111,080: psychological round number and 361.8% extension; also near the underside of the wider down-channel. Expect optionality hedging and profit-taking here.

Support:

• 105,600–105,700: 20-period WMA cluster on the 4-hour; first intraday demand.
• 104,054: 100% retracement of the impulse; must-hold for the trend from 101,370 to remain intact.
• 103,028: 61.8% retracement; last line for bulls before the move turns corrective.
• 101,370: swing low. A break would invalidate the higher-low sequence and reopen 100k/98k.

Risk management markers:

Momentum line in the sand: 105,600 (WMA) for intraday traders.

Structure line in the sand: 104,054; loss and failure to reclaim on the next bar converts the setup into range-bound with downside skew toward 103k.

Alternative scenario

A failure at the trendline—marked by repeated upper-band tags that fade and PPO rolling over—would set up a bull trap. Under that path, Bitcoin slips back into 105.6k, then 104.1k. If 104.1k breaks on rising sell volume and retests as resistance, sellers would have the upper hand toward 103.0k and potentially a full retest of 101.4k. This scenario becomes the base case only if we see a daily close back inside the broader down-channel and beneath the 20-WMA on the 4-hour, accompanied by ROC turning negative again.

Fundamental Outlook and Calendar Implications

While Bitcoin is famously idiosyncratic, its medium-term swings align increasingly with global liquidity proxies and the dollar’s path. Into this week, the fundamental backdrop offers a two-way set of catalysts that can either power a breakout above the downtrend—or sharpen a rejection there.

1. U.S. policy and macro tone. The decisive variable for broad risk has been the tug-of-war between the Fed’s “data-dependent” stance and the optics of a record shutdown. Signs that the shutdown is nearing resolution relieve pressure on consumption and growth expectations, favoring a reset higher in risk assets.

That is dollar negative on the margin, supportive for BTC. Conversely, if resolution headlines stall or if policymakers sound more hawkish than the market expects in this week’s speeches, yields can back up again, and the dollar can firm—usually a headwind for crypto.

2. Fed communications and market-implied path. The calendar is heavy with Fed speak. The market is currently treating December as a coin toss that hinges on labor and inflation expectations data. Without the official NFP print (delayed), traders are leaning on private indicators and sentiment gauges. If those surprise weak, front-end yields can dip further, steepening curves and loosening financial conditions—historically constructive for Bitcoin’s beta. Stronger-than-expected prints or hawkish rhetoric would do the opposite.

3. Equity volatility and “risk-on/off” feedback. Tech-heavy indices are nursing their biggest weekly declines in months, driven by valuation concerns and policy uncertainty around AI exports. If equities stabilize (as futures implied at the open), crypto often participates in relief. If a new leg down emerges, crypto’s correlation to equities can be reasserted in the short run.

4. Crypto-native flows. The selloff into early November cleansed leverage. That matters because it reduces the probability of cascading liquidations on the next 5–7% dip and increases the odds that pullbacks find spot demand at well-watched levels (e.g., 104.1k/103.0k). On the flip side, any renewed deleveraging—visible via funding spikes or rising liquidations—would worsen a rejection at the trendline.

5. Liquidity windows. U.S. Treasury auctions and funding dynamics (e.g., changes in the Fed balance sheet and reserve balances) can marginally affect risk appetite through the dollar and yields. While not BTC-specific, these flows often show up in cross-asset beta the same day.

Putting it together: the fundamental impulse is mildly supportive for a test of the 108k–111k band provided shutdown progress continues, and Fed speakers avoid pushing back hard on easier financial conditions. But the medium-term downtrend is not yet broken. The burden of proof remains on bulls to reclaim the trendline and hold it.

Strategic Positioning

Tactically, the trade location is binary around the descending trendline:

Momentum-longs: consider scaling in on a 4-hour close above 106,740–107,000 with a protective stop back inside 106,100–106,200 (below the breakout bar’s low), targeting 108,400 first and a runner toward 110,000–111,080. Trail aggressively if PPO flattens or if upper-band walks fail.

Dip-buyers: if price rejects 106.7k–107.0k, patient bids near 105,600 and 104,100 offer higher-quality risk-reward so long as intraday momentum doesn’t roll over sharply. Invalidations: a clean break and hold below 103,028.

Counter-trend shorts: the asymmetric spot is a failed breakout that snaps back below 106k with PPO rolling over and ROC < 0; first objective 105,600, then 104,100. This is a lower-probability, faster-moving setup; risk must be tight.

Risk notes: BTC’s realized volatility remains elevated; position sizing should reflect the ~3–5k intraday swings typical around major inflection levels. Avoid anchoring to precise extensions—think zones.

What Would Change the View?

Bullish validation:

• 4-hour acceptance above the trendline and 106.7k, followed by a successful retest that holds the 105.9k–106.2k shelf.
• PPO and ROC staying positive through any consolidation and MFI climbing toward 60–65.
• Breadth—measured by altcoin participation—improving on up days rather than narrow, BTC-only squeezes.

Bearish validation:

• Fast rejection at 106.7k–107.0k with upper-shadow candles, PPO cross-down, and negative ROC.
• Loss of 104.1k on rising sell volume and failure to reclaim on the next bar.
• A return to lower-band walks with bands widening south—shifting the regime back to “sell rallies.”

Bottom Line

Bitcoin’s recovery has earned a shot at the downtrend, but not a breakout pass yet. The price map is straightforward: 106.7k–108k is the gate.

Clear it and hold, and the path opens to 108.4k and 110–111k. Fail there, and a reset to 105.6k/104.1k/103.0k is the high-probability path, with 101.4k the fail-safe for bulls.

Given the macro tape—shutdown progress, a softer dollar at the margins, and a market still debating December—bias is modestly constructive while 104.1k–103.0k holds. Respect the trendline until it breaks; in markets, gravity is the prevailing trend until a stronger force shows up.

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