Bitcoin Nears $112,000: Sustainable Rally or Overbought?
May 22, 2025 — At 9:00 AM ET, Bitcoin (BTC) was trading at $111,406, surpassing its previous all-time high of $111,888. The move comes amid a $2.21 trillion cryptocurrency market cap, fueling bullish sentiment across the entire market.
1-Hour Chart Structure: Short-Term Correction Signs
On the 1-hour chart, Bitcoin has set a series of lower highs, reflecting a slight weakening in momentum after peaking at $111,888. Trading volume has also been declining, while a number of red candles appearing after the peak suggest profit-taking pressure is building. Short-term traders are closely watching the $110,000 area for entry points, with a tight stop loss below $109,800. If BTC fails to clear $111,800 with strong volume, an intraday correction could form. The short-term profit-taking zone is identified between $111,800 and $112,500.
4-hour chart: Uptrend holds
On the 4-hour timeframe, the technical structure maintains a clear bullish momentum after breaking the key resistance at $108,000. BTC successfully retested the $107,500 – $108,500 area and rebounded strongly, supported by a significant increase in volume on the breakout. The ideal entry zone for medium-term investors is in the $109,000-$110,000 range, with buy orders pending confirmation above $112,000. Reversal signals such as bearish divergence or bearish candlestick patterns should be watched near historical resistance.
Daily Chart: Long-term Momentum Consolidating
The daily chart shows a sustained uptrend with successive higher highs and lower lows. After the consolidation phase, a series of strong green candles have emerged, reflecting overwhelming buying pressure. The current high of $111,888 acts as a key psychological resistance. A buy strategy could be considered if the price corrects to the $105,000-$107,000 range, especially if a bullish engulfing candlestick or hammer candlestick pattern appears. The next target zone is in the $112,000-$113,000 range.
Technical Indicators: Bullish but Cautious
The MACD is currently in a positive crossover, supporting the upside momentum. The 10-day EMA and SMA are at $106,369 and $105,839, respectively, acting as technical support near current prices. The RSI is at 78 and the Stochastic is at 95 — both indicating that the market is overbought but not yet signaling a strong reversal.
While the major oscillators are at high levels, the neutral ratings suggest that BTC has room to extend its rally, as long as buying power does not weaken significantly.
Market View
Buyers:
The uptrend is reinforced by higher lows, consistent support from major moving averages, and positive signals from the MACD. The successful breakout across multiple timeframes, along with consensual volume, is the basis for expecting BTC to surpass the $111,888 resistance and establish a new price zone.
Bears:
The correction warning is heightened as oscillators such as RSI and Stochastic enter overbought territory. If BTC fails to reclaim its historical high with high volume, a technical pullback to the $107,000 support area is possible.
Conclusion: Bitcoin is on the threshold of a new price discovery. A break above $112,000 with high volume could further strengthen the bullish sentiment. However, overbought signals and pressure from technical resistance call for caution and strategic stop-loss placement during the current period of high volatility.