Bitcoin in critical test: bear market could be postponed if Bitcoin breaks above $106,000

Bitcoin has returned to $106,400, marking a key pivot point for this cycle’s rally and pullback.

As we outlined in “Today’s $106,000 Retest Decided Bitcoin’s Fate,” acceptance above this band tends to unlock the next level. At the same time, the rejection forced a restructuring below the fair value axis, which acts as both support and resistance depending on flows and positioning.

As outlined in “Today’s 106,000 Retest Decided Bitcoin’s Fate”, the $106,400 band is the fair value axis of this cycle and the support and resistance (S/R) pivot that has repeatedly organized the trend.

Acceptance (after retesting) is usually bullish and usually unlocks the next shelf. If rejected, a rebuild to a lower level is forced.

This is consistent with my previous analysis, “The Bear Market Cycle Started at 126,000,” which argues that with 5 to 10 consecutive days of net gains in the ETF and no apparent bias toward calls, the burden of proof now lies with flows and bias. Ultimately, if it sustains above approximately $126,272, the market will need to treat the increase as a distribution.

So if $106,400 were to reverse, the bull market would widen from $114,000 towards $120,000. If that fails, the $126,000 cap framework will continue to dominate, with a re-opening between $100,000 and the high $90,000s.

The tape scandal depends on whether new demand actually arises.

Bitcoin investment products recorded net outflows of approximately $946 million in the week ending November 3, following heavy inflows the previous week. This type of flow whiplash is not a 5-10 day streak of creating a checklist for the opposite case.

The daily flowprint across the U.S. spot ETF complex has been mixed and choppy, with single creation dates failing to build momentum, according to Farside’s dashboard. When the burden of proof is on flow, stripes matter more than single prints, and so far the data shows inconsistent demand.

Derivative placement adds a second gate. Deribit’s options open interest hit a record of approximately $50.27 billion on October 23, with notable put interest concentrated around $100,000. Rising open interest changes how dealers hedge, often locking the price around the round strike and limiting upside until the skew changes from a put bid to a call bid.

Without a 25 delta skew pivot, and without sustained growth in spot volume along with the works, prices tend to fade back towards the fair value axis rather than building a platform over it.

Level maps are simple and mechanical.

A clean daily close followed by a weekly close above $106,400 to $108,000 will turn the band from a ceiling to support, and historically the price will release into the $114,000 range before supply re-emerges in the $117,000 to $120,000 range.

This confirmation comes from two to three consecutive days of net inflows across the US ETF set, flattening of the bias against calls, and actual spot follow-through. If these conditions expand to 5-10 days of continuous creation, it will pave the way for previously large nodes to exceed $120,000 by the next decision.

Failure manifests itself in the form of cleanly crossing the intraday pivot back to the close or below the high below, while the ETF’s flows remain net negative and the skew tilts back toward the put bid. This sequence controls the $126,000 top framework.

The path of least resistance is $103,000, then $100,000, then a break and the low $90,000s start again. This is consistent with the previous pivot loss repair phase around the same axis, where the replay failure forced price to rebuild the underlying structure until the flow and skew changed.

There is also a microwave case.

Open interest is heavy and dealers are sensitive to gamma around the $100,000 and $110,000 strike prices, so if the ETF stocks fail to work together and the skew changes, fixing it between $102,000 and $109,000 is a reasonable short-term outcome.

This setup eliminates volatility and creates a false break near $106,400, continuing to put stress on structural demand to resolve this range. The spike in daily outflows in late October of nearly $500 million is an example of a headline risk that moves prices without changing the system, and this pattern tends to unwind once the tape pivots.

Halved clock and cycle calculations keep the wider frame intact. If $126,000 is the peak recorded in early October, then the 2021 gain from the high is close to 82 percent, which fits the diminishing return profile we mapped to previous cycles, even if it is slightly above a linear decay.

This timing lens is consistent with the idea that the bearish cycle begins at $126,000 and that a deactivation will require more than a tap on the line at price. It requires evidence from the plumbing implying sustained creation and a durable skew pivot, and then requires a hold above $126,272 to open, in the $135,000 to $155,000 range before distribution resumes.

Quant guardrails help ensure that subsequent tests are accurate.

We flagged the eighth approach to $106,400, which is unusual for a level that lasted this long. Historically, repeated retests result in a loss of support or resistance until a decisive break forces a reprice.

Such a setting emphasizes a rules-based approach, where acceptance or rejection determines positioning and risk, rather than a narrative that assumes levels will continue to function. The same discipline applies to flow, and a green day without follow-through will not meet the 5-10 day bar that defines a structured bid.

The macro modulates the tape, but the trigger remains local. A recovery in yields and a strong dollar tend to weigh on risks and justify recovery failures, while easing financial conditions tend to support Scenario A.

These are secondary switches following ETF creation and option skew, which pose a significant strain on this market given the size of passive spot demand and the concentration of option positioning in round strikes. The flow path must change before the price path extends beyond the known shelves.

If $106,400 is withdrawn over a 2-3 day ETF inflow streak, $114,000 to $120,000 will be back on deck.

If the pivot rejects while the next weekly ETF print shows a net outflow, the $126,000 top framework will pull down the next leg. If the skew remains put-heavy until expiration, the gravity of the derivative will keep the price pinned below the pivot until the burden of proof is reversed.

Charts draw lines, but flow and skew are what trigger them. Barring a 5-10 day run of net creation, a clear bias towards calls, and no holds above approximately $126,272, the rally will be considered a distribution and $100,000 is back in sight.