Bitcoin Rally Near $111K May Signal Short-Term Top as Volume Weakens

• Bitcoin’s euphoric sentiment at $111K mirrors previous market tops, as noted by analyst IncomeSharks, suggesting a possible peak.

• OBV has declined from 1.83 million in July to 1.69 million, indicating reduced buying pressure even as prices hit higher highs.

• Key support at $110,000 is at risk, but a breakout above $115,000 could push toward $120,000–$125,000 resistance.

Discover why Bitcoin’s $111K rally may be fading with lower volume and OBV divergence. Explore key levels and analyst insights for informed trading decisions in 2025.

What is Causing Bitcoin’s Weakening Momentum Near $111,000?

Bitcoin’s weakening momentum near the $111,000 level stems primarily from declining trading volumes and bearish divergences in key technical indicators, despite the cryptocurrency achieving higher price highs since July. Analysts, including those from IncomeSharks, observe that this euphoric market sentiment echoes patterns seen at previous tops, where aggressive bullishness preceded sharp corrections. While the overall uptrend remains intact, these signals suggest that buying strength is diminishing, potentially leading to a short-term pullback if support levels fail.

How Does the OBV Indicator Reveal Bitcoin’s Underlying Trends?

The On-Balance Volume (OBV) indicator serves as a crucial tool for assessing the conviction behind price movements in Bitcoin’s market. In recent months, OBV has trended downward from approximately 1.83 million in July to about 1.69 million, even as Bitcoin pushed to new local highs around $111,000. This divergence highlights a lack of accumulation, implying that while prices rise, the volume of buying is not keeping pace, which often precedes distribution phases where larger holders offload positions.

Experts point out that such imbalances have historically warned of impending reversals. For instance, during similar setups in past cycles, Bitcoin experienced corrections of 10-20% after OBV divergences appeared. IncomeSharks, a prominent market commentator, emphasized on social media platforms that this pattern indicates fading momentum, with the upper resistance trendline now extending toward $127,000–$128,000. Trading volume has also noticeably decreased during the latest rally, further underscoring softening demand. Short sentences like these make the analysis easier to scan: momentum is key, and current data shows it’s waning.

Source: IncomeSharks on X

Supporting data from on-chain metrics reinforces this view, showing that whale activity—transactions over 1,000 BTC—has tapered off compared to earlier in the year. According to blockchain analysis firms like Glassnode, net exchange inflows have increased slightly, hinting at profit-taking. This structured decline in OBV not only questions the sustainability of the current rally but also prepares traders for potential volatility ahead.

Frequently Asked Questions

What Are the Risks of Bitcoin Falling Below $110,000 Support?

If Bitcoin breaches the $110,000 support level, it could trigger a cascade of liquidations, exposing lower supports at $104,000 and eventually $96,000. This scenario would likely stem from continued volume decline and sustained bearish sentiment, leading to a 5-10% correction based on historical patterns observed in similar OBV divergences. Traders should monitor volume closely to gauge the severity.

Could Bitcoin Break Above $115,000 and Resume Its Uptrend?

Yes, a decisive breakout above $115,000 would signal renewed bullish control, potentially targeting the $120,000 to $125,000 resistance zone. This move would require higher OBV readings and increased trading volume to confirm accumulation over distribution. In natural terms, it’s like the market catching its breath before pushing higher, as long as sentiment shifts positively without the euphoria that often precedes tops.

Key Takeaways

• Euphoric Sentiment Warning: Bitcoin’s current mood at $111,000 resembles past tops, per IncomeSharks, urging caution against aggressive long positions.
• OBV Divergence Impact: The drop to 1.69 million OBV despite price highs indicates weakening buyer conviction, a classic pre-correction signal backed by historical data.
• Monitor Key Levels: Watch $110,000 support for downside risks or $115,000 resistance for upside potential to inform timely trading actions.

Conclusion

Bitcoin’s rally near $111,000, marked by weakening momentum and OBV divergence, underscores the need for vigilance in a market prone to rapid shifts. As trading volume declines and sentiment echoes previous peaks, key price levels at $110,000 support and $115,000 resistance will dictate the next move. Staying informed on these technical trends positions investors to navigate potential corrections or renewed uptrends effectively in the evolving crypto landscape.