Bitcoin (BTC) recently made another attempt to reclaim the $108,000 resistance level but faced rejection at the start of Q3. This has prompted several market observers to advise a more cautious approach in the coming months.
Bitcoin Maintains a Critical Range
Bitcoin closed the second quarter by once again testing the $108,000 barrier before being rejected. It finished the period near the $107,140 zone, marking one of its highest monthly closes in history.
Despite this positive performance, the leading cryptocurrency began July with a pullback toward $105,000, touching a weekly low of $105,623. Analyst Rekt Capital interpreted this price action as part of an ongoing post-breakout retest, a process that could strengthen the asset for another upward leg.
The analyst had previously emphasized that Bitcoin needed to secure a weekly close above the $104,400 support level. Reclaiming this area would help solidify the recovery and position BTC to retest and confirm this level as support. Furthermore, it would allow the asset to build a foundation for transitioning into its next discovery phase. According to a recent analysis, the new weekly close indicates that Bitcoin is positioned for exactly this kind of retest.
Rekt Capital also observed that over the past 40 days, BTC has broken out of two separate two-week downtrends. However, it was rejected from a crucial six-week downtrend residing around the $108,000 mark.
Sjuul, from AltCryptogems, also noted the significance of this rejection, stating that “the bulls must step in quickly and not allow the price to drop too much.” For a sustained bullish structure, Bitcoin needs “a strong bounce from the most important support and resistance level, which is at $106k–$104k, to hold instantly.”
A failure to hold this zone could open the door to a deeper correction, with the risk of a decline toward the $101,000–$102,000 range. Sjuul highlighted the significant gap between the current support area and the next major macro support level that has formed during the recent price advance.
Potential for a Significant Q3 Pullback
Sjuul pointed out that below the $101,000 support, “there isn't much to defend the price from falling much further.” He added, “BTC’s historical quarterly returns in Q3 aren’t great, so that adds extra caution to the picture we are taking from the charts.”
Echoing this sentiment, Daan Crypto Trades noted that historical data suggests the third quarter is typically the slowest period for Bitcoin and Ethereum (ETH) due to reduced activity, volume, and liquidity during the summer months.
He added that with the new quarter and month beginning, BTC might experience a “choppy start.” However, Bitcoin is still consolidating within its current range and inside a descending channel, suggesting investors may have time to “let it play out and watch for confirmation” on the direction for the rest of the month.
Despite this, analyst Ali Martinez has raised a notable warning signal. He highlighted that the Tom DeMark Sequential indicator, a tool that has historically preceded major Bitcoin downturns, has flashed a sell signal on the quarterly timeframe.
Notably, the same signal appeared in 2015 and 2018. Following those signals, BTC corrected by more than 75% and 85%, respectively. If historical performance repeats, Martinez suggests BTC could see a decline toward $40,000 this quarter.
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At the time of writing, Bitcoin is trading at $105,901, down 1.16% on the daily timeframe.
Frequently Asked Questions
What is the key support level for Bitcoin?
The most immediate and critical support level for Bitcoin is between $104,400 and $106,000. A weekly close below this zone could open the door for a deeper correction toward $101,000.
Why are analysts cautious about Bitcoin in Q3?
Historical data shows that the third quarter has often been a period of slower performance or negative returns for Bitcoin. This seasonal trend, combined with current technical rejections at resistance, is causing analysts to advise caution.
What is the Tom DeMark Sequential indicator?
The Tom DeMark Sequential is a technical analysis tool used to identify potential trend exhaustion and points of reversal. A sell signal on its quarterly chart has previously preceded major Bitcoin price corrections.
What happens if Bitcoin breaks above $108,000?
A sustained break and weekly close above the $108,000 resistance level would be a strongly bullish signal. It would likely invalidate the current descending trend and could open the path for a new leg up in the price discovery phase.
How accurate are these technical indicators?
While technical indicators like the Tom DeMark Sequential have a history of predicting major turns, they are not foolproof. They should be used in conjunction with other analysis, such as on-chain data and macroeconomic factors, for a more complete market view.
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