Bitcoin has erased the losses from the previous week, approaching a key resistance level. The cryptocurrency underwent a V-shaped recovery after a recent selloff, but breaking this resistance is necessary to push towards a new all-time high.

The price drop last week was influenced by a conflict between Musk and Trump, impacting other risk assets such as stocks. This was compounded by concerns over Trump’s tax bill, which could suppress growth projections. As tensions eased, both Bitcoin and stocks began to recover, displaying a strong comeback.

Bitcoin faces three main risks: the potential failure of Trump’s tax bill, a renewal of the trade war after July’s deadline, or increased inflation fears prompting adjustments in interest rate expectations. The 4-hour chart shows the swift decline to the 100,723 level, followed by a sharp recovery as buyers increased their positions. The price is currently trading close to the resistance zone at 106,800.

At this resistance point, sellers may enter the market with the aim of pushing the price back to 100,723, while buyers seek a breakout to drive the price towards a new all-time high.

That sharp rebound we’ve seen—climbing from the lows around 100,723—was more than just a routine bounce. It followed a quick round of risk aversion that spilled across broader markets, drawing down sentiment and knocking risk assets as a group. With tensions now reduced and equities also regaining ground, recent strength in Bitcoin appears to be riding the broader recovery wave, though it remains close to a level that has previously limited progress.

The activity in this resistance zone around 106,800 is telling. This threshold has historically drawn profit-taking and renewed selling. Now that the asset is brushing against that level again, short-term traders are likely split. On one side, those aiming lower will watch for weakness here to either initiate shorts or re-enter at more advanced prices. Meanwhile, upwards momentum traders will need a clear break and hold above this level before expanding exposure.

Chances for a clean breakout rest, at least in part, on whether external pressures remain muted. We’ve already seen how macroeconomic jitters—particularly the friction around trade guidance and tax proposals—can quickly shift market direction. There’s no shortage of economic data in the coming weeks, and any deviation in inflation readings could bring back talk of earlier rate actions, which might weigh further on riskier positions.

From our vantage point, price behaviour around this resistance can offer early clues. Should it stall here again, and no new macro drivers appear, we would expect another rotation back toward the 100,723 area, this time possibly quicker given how compressed the move up has been. Positioning around this support would become even more important as failure there would change the overall trend bias for the coming month.

Volume also matters here. In the last leg upwards, we saw an increase in interest—buyers appeared to step in aggressively. That needs to hold. Without follow-through on volume, even sharp rallies can fizzle just as quickly. The next one or two daily candles will help confirm whether commitment is building or if buyers are unwilling to chase at current levels.

At this point in the cycle, managing exposure means monitoring not just price targets, but also the tone of broader discussions around taxes, policy, and trade. As we’ve seen this past week, even non-market events can ripple into price reactions. So it helps to stay looking beyond the chart.