Bitcoin Technical Analysis: Defend New Highs & Next Rally
- Kimi
- May 22
- 3 min read
In recent trading sessions, Bitcoin has surged past its previous all-time high, briefly trading above $109,400 amid renewed risk-on sentiment and favorable regulatory progress .
While on-chain data and institutional inflows continue to underpin bullish momentum, certain overextended indicators hint at an imminent correction before a sustainable breakout .
Critical support zones around $105,000 and $100,000 will serve as litmus tests for Bitcoin’s ability to consolidate these gains and launch a fresh leg higher .
Ultimately, maintaining above these levels could pave the way toward next targets in the $120,000–$130,000 range, fueled by ETF inflows and macro tailwinds .
Bitcoin Recent Price Action
Bitcoin’s price eclipsed $109,400 on May 21, marking a decisive break above the January peak of $109,224 and settling near $109,176 by day’s end .
This new all-time high followed a powerful 46.5% rally from the early-April lows, driven by renewed risk appetite and weakening U.S. dollar strength .
The move was underpinned by a 3% jump in a single session, coinciding with $6.9 billion in Bitcoin ETF inflows and growing corporate acquisitions .
Regulatory catalysts, including U.S. Senate advances on stablecoin frameworks and state-level Bitcoin reserve proposals, have further amplified market confidence.
Bitcoin Key Technical Indicators
On the daily chart, Bitcoin has formed a bullish pin bar candlestick following the breakout, signaling buyer conviction near the top of the range .
A golden cross—the 50-day moving average crossing above the 200-day moving average—has also materialized, typically presaging extended uptrends.
However, the Relative Strength Index (RSI) on weekly timeframes shows a bearish divergence against price, suggesting momentum may be waning at extreme levels .
Short-term momentum oscillators like the MACD and stochastic RSI remain elevated, warning of potential pullbacks before a clean continuation .
Bitcoin Support and Resistance Levels
Immediate Resistance:
$110,000 psychological barrier, reinforced by Fibonacci 1.0 extension around $109,618 .
Fibonacci 1.61 extension near $130,810 remains the next major technical objective if bullish momentum sustains .
Key Support Zones:
$105,000 horizontal level, representing both the pre-breakout high and current 50-day SMA confluence .
$100,000 round figure, backstopped by historical demand zone and long-term trendline support .
$90,000 lower support, marking the 200-day SMA and a strong accumulation area during the April bounce .
Bitcoin Potential Scenarios
Bullish Continuation
If Bitcoin holds above $105,000 on a daily close, the path toward $120,000 opens, backed by ongoing ETF inflows exceeding $6 billion per session and rising futures open interest .
A sustained break above $110,000 could trigger momentum traders, accelerating the rally toward the Fibonacci $130,000–$135,000 zone .
Short-Term Pullback
Failure to defend $105,000 may prompt a retracement toward $98,500–$100,000, aligning with overbought RSI corrections and negative weekly divergence .
In a more severe downside, a test of $91,000 cannot be ruled out, echoing patterns seen during prior ATH retests in 2021 .
Conclusion
Bitcoin’s breach of $109,400 represents a compelling bullish milestone, yet the convergence of overbought technical signals suggests a measured approach. Defending the $105,000–$100,000 support corridor will be pivotal for confirming the next leg up.
Should these levels hold, institutional flows and macro tailwinds could drive Bitcoin toward new frontiers in the $120,000–$130,000 range over the coming weeks. Conversely, a break below these supports may invite a corrective phase, offering strategic entry points for longer-term bulls.
In either case, close monitoring of price action around these key zones will determine whether Bitcoin can truly sustain its breakout and kick off the next major upward swing.
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