Bitcoin Faces Double-Top Risk: Will BTC Dip Below $106K?

Bitcoin hovers above $109K, with a double-top pattern hinting at a possible correction.

As Bitcoin remains near the psychological level of $110,000, short-term price action suggests a double-top reversal. Could increasing market greed fuel a pullback below $106,000?
Market Sentiment Hits Greed Phase
According to a recent tweet by Darkfost, a crypto analyst, the Crypto Fear and Greed Index has entered the greed phase. Historically, extreme greed in this index often signals a local top. However, it can also reflect increased optimism for strong Bitcoin performance.

Bitcoin Price Analysis
On the 4-hour time frame, Bitcoin’s price shows a bullish attempt to maintain dominance above the $100,000 mark. This has led to a sideways trend, with local support forming above the $109,000 level.

However, the price action suggests a double-top pattern, with the neckline at the $109,000 mark. A potential dip below this level could lead to an extended correction. A bearish divergence in the RSI also supports the possibility of a gradual decline.

According to trend-based Fibonacci levels, a potential reversal could test the 23.60% Fibonacci level at $105,905, indicating a downside risk of over 3% if sellers regain control.

On the flip side, a breakout above the 50% Fibonacci level at $110,664 could extend the bullish trend toward a new all-time high. The 100% Fibonacci level, just below $120,000, remains a potential price target.
Bullish Sentiment Declines in BTC Derivatives
As technical analysis points to a possible correction, bullish sentiment appears to be fading in the Bitcoin derivatives market. Open interest is down 2.51% to $75.09 billion, reflecting a $1.8 billion decline.

In the past 24 hours, liquidations of around $28 million from both long and short positions indicate ongoing uncertainty in Bitcoin’s trend. However, a long/short ratio of 1 and a spiking funding rate of 0.0075% suggest underlying optimism remains.

Binance traders show a bearish bias: 65.91% of accounts involved in BTC perpetual trading hold short positions. This suggests a majority of Binance traders anticipate a steeper correction in Bitcoin.