The Bitcoin price (BTC) has suffered a significant drop, breaking through crucial supports that had held the asset for weeks. This week’s price action invalidated the key 100-day and 200-day moving averages, a technical development that has put traders on alert. As a result, traders and analysts are now closely watching downside liquidity, with a growing consensus pointing to the $107,000 zone as the next logical target.
The Fall of Crucial Technical Supports
The recent price action has been decidedly bearish. Bitcoin not only failed to maintain upward momentum but also gave up vital ground. The asset fell below its 100-day moving average (MA), located near $114,230, and shortly after lost the 200-day MA, a key psychological and technical support situated around $112,000. This breakdown, losing key moving averages, is seen by many analysts as a significant bearish signal.
Data from Cointelegraph Markets Pro and TradingView showed that the Bitcoin price hit a local low of $111,650 on platforms like Bitstamp, marking a clear invalidation of the previous support structure. Other analysts noted on X that the simultaneous loss of both MAs could set the stage for “a big move down,” as the market had not seen such a confluence of bearish signals in some time.
The Focus Shifts to Downside Liquidity
With key supports broken, the conversation among traders has rapidly shifted. Optimism for a quick recovery has been replaced by anticipation of a further decline. The market narrative has changed from “buying the dip” to identifying where the next large cluster of buy orders, known as liquidity, is located. Popular trader Skew highlighted that the market is now “hunting downside liquidity” after what he described as a “clean breakdown” of the previous structure.
This shift is fundamental. Instead of buyers stepping in to defend price levels, the market now appears to be “hunting” stop-loss orders and lower limit-buy orders. When supports as significant as the 100-day and 200-day MAs break, it triggers automated selling, which accelerates the decline. The Bitcoin price is being drawn toward these lower liquidity zones.
The “Liquidity Void” and the $107K Target
Market analysis is now focused on a concept known as a “liquidity void” or “liquidity gap.” The analysis firm MN Capital pointed out that a notable gap exists in the order book between $112,000 and $107,000. This area represents a zone where there was historically less trading, meaning the price can move through it very quickly, either up or, in this case, down. The break below $112,000 has triggered a cascade of stop-losses.
This void essentially acts as a magnet for the price. Algorithmic traders and momentum traders see this zone as an easy target, anticipating that the price will fall to “fill” that gap. For this reason, the $107,000 level has become the primary point of interest. It is the next logical level where a significant amount of buy orders (liquidity) is expected to be waiting to potentially absorb the selling pressure.
Conclusion and Future Outlook
The situation for the Bitcoin price has become precarious in the short term. The inability to hold the most-watched technical supports sends a clear signal of weakness. While the crypto market is known for its volatility and rapid reversals, the current technical consensus is decidedly bearish in the short term. Attention has shifted from hopes of new highs to managing the risk of further downside.
For bullish sentiment to return, Bitcoin would need to convincingly reclaim the $112,000 level and, preferably, the 100-day MA above $114,000. However, as long as the price remains below these former support zones, which now act as resistance, traders will continue to eye the $107,000 level. The market is now waiting to see if that liquidity level can provide a solid floor for Bitcoin for the market’s next leg.
