BTC snaps the 112k neckline: fade the bounce, aim for 105–106k within 24 hours

Executive summary

• Context: BTC sold off hard today, breaking the 110–112k shelf and closing the hour at ~107.85k with elevated volume. The break converts 110–112k into resistance. Daily momentum is weak, structure is bearish, and price sits near/just below lower volatility bands. A modest relief bounce into 108.7–110.0k is likely before another leg lower within 24h.
• Base case (next 24h): Dead‑cat bounce toward 108.7–110.0k, fade it for continuation lower into 106.2–105.6k, with risk of an extension to ~104.8k if momentum persists.

1. Multi‑timeframe market structure

• Weekly: Lower high versus mid‑July/Aug‑mid prints (~123k). This week currently a wide red candle rejecting last week’s 112–114k base. Weekly trend bias tilts bearish unless quickly reclaimed above ~112.5k.
• Daily: Sequence of lower highs since Aug 13 (~123.7k), followed by breakdown through the 112k neckline today. The 112k area was tested repeatedly (Aug 27–28), then failed with a decisive bearish hourly expansion move. Measured‑move risk points to 101–103k if the neckline break fully develops.
• Intraday (H1): Clear intraday downtrend: successive lower highs (111.8 → 111.3 → 110.7 → 109.8 → 108.7) and lower lows (111.0 → 109.6 → 108.2 → 107.7). The last hour showed expansion and elevated volume, suggesting trend persistence after a small bounce.

2. Key levels and order flow context

• Resistance: 108.7–109.0k (local supply and 38.2–50% retrace of the latest leg), 109.8–110.7k (mid‑band/VWAP cluster and 50–61.8% retrace), 112.0–112.5k (broken neckline; major supply).
• Support: 107.6–107.8k (intraday sweep low), 106.2–105.6k (June congestion/ATR objective), 104.7–104.2k (June swing supports), 101.0–101.6k (June lows/major).
• Liquidity: Stops likely reside above 109.8–110.2k (short‑term high cluster) and below 107.6k (today’s low). A common pattern is a small bounce to harvest resting liquidity above 108.7–109.0k, then continuation.

3. Momentum and oscillators

• Daily RSI(14): ~32.6 (derived from closes Aug 15–29). Near, but not at, classical oversold (30). This allows further downside before a stronger mean reversion.
• Hourly RSI: Sub‑30 during the flush; small positive divergence attempts are shallow so far. Expect a bounce to reset to 40–50 then roll.
• MACD (Daily): 12/26 EMA spread negative and widening; histogram expanding—bear continuation cue.
• Stochastics: Oversold on H1/H4, but in trends this can “stick.” Use as timing for bounces, not reversal.

4. Trend and moving averages

• Daily 20/50 SMA: Price trades well below both (est. mid‑116k/low‑118k region). Bearish alignment with negative slope; rallies toward the 20‑day are sells.
• H1 20/50 EMA: Bearish stack with frequent 20EMA rejections; expect the 20–50EMA zone near 109.2–109.8k to cap the relief bounce.

5. Volatility framework

• ATR(14) Daily: ~4.0–4.5k estimated from recent ranges. Today’s move is consistent with trend expansion. A 24h expected range from ~105.2k to ~110.4k is reasonable.
• Bollinger Bands (Daily, 20, 2): Mid near ~116–117k; lower band ~108–109k. Price is riding/lipping below the lower band: common to see a snapback toward the band/mid‑H1 mean first, then a second push lower.
• Keltner Channels (Daily): Price outside/bottom envelope—trend acceleration signal; fade rallies until price cleanly re‑enters.

6. Ichimoku (Daily, classic settings)

• Price below the Kumo; Tenkan ~113.7k and Kijun ~117.3k (estimates). Bearish stack: price < Tenkan < Kijun; Span A/B above price; Chikou below price and cloud. Strong trend‑down context—rallies into Tenkan are sells.

7. VWAP and anchored VWAP

• Session/day VWAP (approx): Below 110k with price trading below VWAP all day—sellers in control. Expect VWAP to act as intraday lid on bounces.
• Anchored VWAP (August start or Aug 13 swing high): Likely ~114–116k—well above; downside pressure persists until a decisive reclaim.

8. Fibonacci mapping

• Latest impulse (Aug 28 close 112.545k → 107.852k):
  • 38.2%: ~109.7k
  • 50%: ~110.2k
  • 61.8%: ~110.7k These align with prior micro supply; optimal fade zone is 109.7–110.7k, with a conservative early entry ~108.8–109.0k if momentum caps the bounce.
• Larger swing (Aug 13 high 123.68k → Aug 25 low 110.12k): Prior retraces to 115.3k/118.5k were rejected, validating lower‑high formation.

9. Pattern diagnostics

• Double‑top/failed breakout near 123k (July 14 and Aug 13). Neckline ~112k. Today’s clean break activates a measured move of ~11k toward ~101k over multi‑day horizon. Within 24h, 105–106k is a realistic waypoint.
• Bear flag breakdowns on H1 progressing into a descending channel; upper boundary currently intersects around 109.5–110.2k.

10. Volume, OBV, and tape

• Rising sell‑side volume into the breakdown hour (20:00 UTC) suggests initiative selling, not merely liquidation. OBV (conceptually) points down since mid‑month. Absorption is limited below 109k so far.
• Risk of a brief short‑cover pop if funding tilts negative; use it to enter shorts at better prices rather than chase lows.

11. Statistical/quant cues

• Regime: Trend‑down with elevated realized vol. Mean reversion windows shorter than trend legs; probability favors continuation after shallow retrace.
• Hurst bias > 0.5 intraday (trend‑following edge) inferred from persistent lower lows/highs sequence.

12. Elliott wave (tactical)

• Impulsive 5‑wave drop off 112.5k into 107.7k likely completed wave 1/3 on micro scale, setting up an ABC corrective bounce toward 109.6–110.2k before the next push to ~106k.

13. Scenarios with probabilities (24h)

• Bearish continuation after bounce (base case, ~60%): Relief to 108.7–110.0k, then lower to 106.2–105.6k; extension risk to ~104.8k if momentum persists.
• Sideways chop (30%): 107.2–109.8k range builds value before next week.
• Sharp reversal (10%): Reclaim and hold above 110.7k → squeeze toward 112.0–112.5k; would weaken the short case tactically but not flip daily structure unless 112.5k converts to support.

14. Trade plan (tactical short)

• Rationale: Trend, structure, momentum, and neckline break all favor selling bounces. Fibonacci and intraday MA/VWAP confluence around 109.7–110.7k provide optimal risk:reward. To ensure a fill if bounce is shallower, a first entry at ~108.9k is practical.
• Entry: 108,900 (primary limit sell). Alternative adds (not required for order): 109,700–110,200 if reached.
• Target (24h TP): 105,600 (near ATR objective and June congestion). Room to extend to ~104,800 if momentum persists.
• Invalidation/stop (discipline, not part of order schema): 110,750 hard stop (above 61.8% retrace/EMA cluster); aggressive traders can trail above 110,200 once in.
• Risk:Reward (to 105,600 vs 110,750 stop): ~1:1.9 on the 108,900 entry; improves if adds near 110k.
• Management: If price fails to bounce and breaks 107.6k first, either wait for a weak retest back to ~108.2–108.5k to enter, or take smaller market size with tighter risk.

15. What changes my mind

• Strong reclaim and acceptance above 110.7k, then 112.0–112.5k (neckline) turning into support on volume—would neutralize/flip the 24h bias.

Bottom line

• Short the bounce. Optimal shorting zone starts ~108.9k; main supply 109.7–110.7k. Target 105.6k within 24h, with scope to 104.8k if trend accelerates. Invalidation above ~110.75k short‑term; a close back over 112.5k would negate the breakdown thesis on higher timeframe.