16 Oct 2025
Bitcoin currently exhibits a short-term bearish divergence and struggles at significant resistance, yet massive liquidity above price and negative funding rates signal potential for a short squeeze. Major altcoins like Ethereum, Solana, XRP, and Chainlink are retesting crucial support and resistance levels, navigating sideways ranges within their respective larger trends.
The weekly Bitcoin price chart's super trending indicator remains green, indicating a larger bull market, but a massive bearish divergence persists, causing a cool-off or pause in the larger bull market since July/August.
The 3-day Bitcoin price chart shows a small gain in bullish momentum, moving towards a potential bullish crossover in the MACD within the next week, which historically has preceded short-term bullish price action upon confirmation.
Bitcoin currently faces significant resistance at approximately $117,000; a confirmed breakout above this level targets $120,000, then the all-time high near $124,000. Short-term support is at $114.5K, with further support between $113,000 and $113.5K, just above $110,000, and between $106.7K and $107.6K.
A short-term bearish divergence is active on the 4-hour time frame, indicating a likely lack of bullish momentum and weakness for a few days, but bearish divergences do not always result in a full trend reversal.
A new short-term bearish trend, potentially lasting weeks, would be confirmed if Bitcoin breaks below $114.5K with confirmation, fails to recover, and forms a lower high.
Massive liquidity is building just above Bitcoin's price, around $118,000 to $119,000, which is a potential price target as Bitcoin often moves to wipe out liquidity.
Negative Bitcoin and crypto funding rates across many exchanges indicate high demand to short these assets, meaning short positions pay fees to long positions every 8 hours, financially incentivizing closing shorts or opening longs, potentially leading to a short squeeze.
A long position on Bitcoin is maintained while still within the bullish trend, with some profits secured at resistance levels and stop-losses placed in slight profit to limit downside while allowing for further upside.
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The 3-day Bitcoin dominance chart is in a larger bearish movement, but a short-term bullish divergence suggests a possible sideways consolidation or slight bullish relief for a few days to a week, potentially causing altcoins to underperform Bitcoin temporarily.
Ethereum remains in a long-standing sideways price range on the 3-day time frame, between support at $3.9K-$4.1K and resistance at $4.8K-$4.9K. The 4-hour chart shows ETH retesting $4470-$4.5K, an area that acted as both previous support and resistance.
A confirmed breakout above $4.5K for Ethereum, with candle closes holding as support, targets a bullish move towards $4550 and likely above $4.6K. Failure to break out, leading to a rejection, would target support at $4250-$4280 and around $4370-$4380.
Solana maintains a long-term bullish trend on the 2-day time frame, forming higher lows and highs, and is holding above crucial short-term support at $230. Further support exists at $215.
The next major resistance for Solana is between $260 and $265. A 12-hour bearish divergence is causing a slight cool-off and lack of bullish momentum in the immediate short term, which could last for a few days to a week before a potential continuation of the larger bullish trend.
A massive weekly bearish divergence on the XRP price chart, active since July from around $3.40-$3.50, continues to influence the price, signaling a prolonged cool-off and lack of bullish momentum on larger time frames.
XRP is currently in a daily sideways price range, with minor support at $2.90-$2.95 and significant support at $2.70-$2.80. Strong resistance is present at $3.10-$3.15, and a breakout above $3.15 targets $3.30-$3.35.
XRP and other altcoins' movements are highly influenced by Bitcoin's performance; a continued short-term bearish divergence in Bitcoin could cause weakness for XRP, while a Bitcoin short squeeze or bullish move could positively impact XRP.
Chainlink is in a short-term sideways price range but maintains a larger bullish trend despite a current cool-off or pullback. A confirmed break below crucial support at $22, failing to recover and flipping it to resistance, would signal a significant bearish trend, targeting $19-$20 and potentially lasting weeks to months.
Resistance for Chainlink's current sideways range is at roughly $25-$25.20, with strong resistance just under $27, specifically between $26.70 and $27.
Negative funding rates and liquidity building above the price are key ingredients that can cause a short squeeze, especially when short positions pay funding fees to long positions, financially incentivizing closure of shorts or opening of longs.
| Market Signal | Implication | Outlook |
|---|---|---|
| Bitcoin Weekly Bearish Divergence | Ongoing larger bull market cool-off/pause, active since July/August. | Caution |
| Bitcoin 3-Day MACD Potential Bullish Crossover | Small gain in bullish momentum, historically followed by short-term bullish price action. | Positive Potential |
| Bitcoin Liquidity above Price & Negative Funding Rates | Key ingredients for a short squeeze, financially incentivizing long positions and adding buying pressure. | Bullish Potential |
| Bitcoin Breakout above $117,000 | Confirms bullish continuation, next targets $120,000, then $124,000 (ATH). | Bullish Confirmation |
| Bitcoin Break below $114.5K & Lower Highs | Forms bearish price structure, pointing to an end of short-term bullish trend and potential new bearish trend for weeks. | Bearish Confirmation |
| Ethereum Breakout above $4.5K | Likely bullish move towards $4550, potentially above $4.6K. | Bullish Confirmation |
| Chainlink Confirmed Break below $22 | Significant bearish price structure, potential larger bearish trend for weeks/months, targeting $19-$20. | Bearish Confirmation |
