TLDR
- Bitcoin is retesting $111K support after closing above the 21-week EMA.
- BTC price bounced from $113500 while testing support on lower timeframes.
- Hourly RSI shows hidden bullish divergence despite high timeframe weakness.
- BTC trades near $114K ahead of the US Fed’s key interest rate decision.
Bitcoin is holding near $114,000 as it tests key support zones, with traders watching for signs of a continued uptrend. The price closed the previous week strongly, and short-term indicators now suggest that bulls are attempting to confirm support at critical levels. Traders are paying close attention to $113,500 and the 21-week EMA, which are seen as key levels for the next move.
Price Retest Ongoing After Weekly Close Above Key Levels
Bitcoin began the week by consolidating around the $114,000 mark after closing above important support levels. According to trader Rekt Capital, Bitcoin has closed above both the 21-week exponential moving average (EMA) at $111,200 and the $114,500 zone. These levels are now under retest, which is common after such closes.
Rekt Capital explained, “Bitcoin has successfully Weekly Closed above both the 21-week EMA (green) and $114.5k (black).” He added that Bitcoin may retest these levels through a brief dip, possibly wicking into the EMA before recovering. Later, he confirmed that this retest was already “in progress.”
Source: Rekt Capital/X
During Monday’s trading session, the price bounced from the $113,500 level. Crypto investor Ted Pillows pointed to this level as crucial, saying, “As long as Bitcoin holds this, we are going higher. If BTC loses this level, expect a correction towards the $110,000 level.”
RSI Shows Hidden Bullish Divergence on Lower Time Frames
While price action remains range-bound, some technical indicators suggest room for upward movement. On the hourly chart, the Relative Strength Index (RSI) shows a hidden bullish divergence. This is often seen when the RSI makes a lower low, but price prints a higher low, signaling potential trend continuation.
This divergence offers early support for a short-term bounce. However, on higher time frames, the RSI still shows signs of weakness, with the indicator forming lower highs while Bitcoin has pushed toward higher price levels. This suggests that although short-term strength may develop, the longer-term momentum could be slowing.
Still, these hourly signals provide bulls with some breathing room while key support zones are being tested. With the Federal Reserve’s interest rate decision approaching, traders remain cautious, but aware of short-term signals.
Market Awaits Fed Decision as Risk Assets Slow
Broader financial markets showed early signs of caution ahead of the U.S. Federal Reserve’s interest rate decision this week. U.S. stock futures, including the S&P 500, cooled slightly before Wall Street’s open. Risk assets like Bitcoin often react to monetary policy changes and have seen increased volatility around rate meetings.
Ted Pillows also pointed out that Bitcoin tends to put in local lows on Tuesdays, which leaves room for further downside testing early in the week. The timing coincides with typical trading behavior around macroeconomic events, adding to market uncertainty.
Source: Ted Pillows/X
Despite the cautious tone in traditional markets, some analysts maintain that conditions still support asset growth. Mosaic Asset Company stated in its newsletter, “Evidence of economic growth is boosting the earnings outlook while loose financial conditions is a catalyst for more growth.” It added that the chance of rate cuts alongside economic strength could support both equities and crypto markets.
Bulls Eye Next Move as Price Hovers Near Resistance
As of Tuesday, Bitcoin continued to move around the $114,000 level while showing some support at $113,500. The key question remains whether this retest confirms the breakout or leads to a move lower. If $113,500 holds, it could set the stage for a move toward new local highs.
However, if the level breaks, Bitcoin may revisit $111,200 or even the $110,000 zone. This would still be within the broader trend range, but could delay any immediate upside. Traders are closely monitoring price action and RSI signals to determine if the current support test holds in the coming days.
