Is Bitcoin's Rally Fading?

The leading cryptocurrency retreats as volume plummets, leaving traders on the edge of their seats.

Bitcoin (BTC), the largest cryptocurrency by market capitalization, is at a crucial point on July 4, 2025. After a failed attempt to break above key resistance, the price fell back to $107,935, down 1.47% from its opening at $109,545. This correction comes amid a marked decline in trading volume and technical signals pointing to potential short-term weakness, generating uncertainty in the BTCC futures market.

Technical analysis reveals that Bitcoin has re-entered a bearish channel that has been in place since May 22. / TradingView

Price Crossroads: Bearish Channel and Key Supports

Technical analysis reveals that Bitcoin re-entered a bearish channel that has been in place since May 22. This move was confirmed by a medium-sized black candle that closed within the channel, invalidating an apparent bullish breakout from the previous day. This "fakeout" is a bearish signal, indicating that buyers have failed to maintain control and sellers are regaining ground.

Despite this short-term weakness, the medium-term trend remains bullish. Bitcoin remains above its 50-period Exponential Moving Average (EMA50) at $104.645 and its EMA200 at $95.077. The EMA50 is also above the EMA200, a pattern known as a "golden cross" that historically suggests lasting bullish momentum.

However, traders' eyes are on critical support. The EMA50 at $104.645 is the first stronghold to defend. Near it, the 0.618 Fibonacci levels at $105.759 and the 0.5 Fibonacci levels at $104.300 reinforce the importance of this zone. If this line of defense fails, the next downside target would be the psychological and structural level of $100,000, a round figure that often attracts strong market reactions.

Momentum Indicators Signal Caution

Momentum indicators also suggest cooling buying enthusiasm. The RSI (Relative Strength Index) stands at 54.76, a neutral level that leaves room for movement in both directions. However, the MACD (Moving Average Convergence/Divergence) histogram, although positive, has dropped to 279.90 since the previous day, indicating a slowdown in bullish momentum. The Bull Bear Power (BBP) at 7642, although positive, also retreated, reinforcing the idea that buying pressure is easing.

Volume and Futures Data: Alarm Bells Are Ringing

One of the most worrying data is the drop in trading volume. Binance Spot's 24-hour volume was 132,310 BTC, a drop for the second consecutive day and below the 25-day average of 146,430 BTC. Even worse, Bitcoin's global spot volume of $4.61 trillion is the lowest since October 2024, reflecting a palpable lack of overall market interest. Net flow into Bitcoin ETFs also saw a 52.5% drop in volume, falling from $5.24 trillion to $2.49 trillion.

In the futures market, Open Interest (OI) increased slightly by 1.61% to $76.27 trillion, with a positive Funding Rate of +3.97%. This combination of rising OI and positive rates while the price is falling suggests excessive leverage in long positions. The liquidation data is compelling: $50.48 million in total liquidations, of which 90.06% were long positions. This indicates a leverage drain that could continue if the price fails to find support. The "Levering Up" concept shows that 5.35% was leveraged despite the price only rising 1.92% in the past seven days, magnifying the risk of further declines.

Caution is the watchword

The current technical bias is neutral to slightly bearish in the short term. Despite the medium-term uptrend, recent price action and weak volumes suggest that caution is key. Traders are advised to "wait and see" the price's reaction to key support and resistance levels before making any further decisions.

Disclaimer: This article is based solely on technical analysis and historical and real-time data provided and should not be construed as financial advice. Cryptocurrency futures trading involves significant risks and may result in the total loss of capital. Investment decisions should be made at the reader's own risk, preferably in consultation with a financial professional.