Bitcoin’s recent failure to sustain its upward momentum has raised alarms within the cryptocurrency community. After briefly approaching an all-time high of $126,000, the leading digital currency experienced a notable correction, underscoring a potential shift towards bearish market conditions.
On the daily chart, Bitcoin’s inability to break through the $126,000 hurdle resulted in a significant drop to the $100,000 mark, although a quick rebound was noted. This retreat from the all-time high zone, coupled with a decline below the 100-day moving average, indicates a troubling loss of bullish market momentum. Observers are now eyeing the $100,000 range as a crucial support level, which not only aligns with a key trendline but also coincides with the 200-day moving average. Current Relative Strength Index (RSI) figures hover around 41, suggesting that while the market appears to be cooling, there remains the potential for additional downward movement unless buyer engagement intensifies.
Zooming in on the 4-hour chart, Bitcoin found temporary support at the $110,000 zone, a level previously identified as an accumulation area prior to its last upward surge. This short-term support is critical as the RSI indicates a weak position, resting at 32, reflecting limited buying strength. Immediate resistance is identified around $117,000, where prior support has flipped. Should Bitcoin fail to reclaim this resistance, further declines could beckon, potentially driving prices down towards the $105,000 region, which corresponds with the lower boundary of a significant ascending channel. A breakdown from this channel may signal the end of the current bull market, possibly leading Bitcoin into a prolonged downtrend along with the broader cryptocurrency landscape.
The sentiment analysis paints a sobering picture of market psychology. A massive spike in long liquidations has occurred, marking this event as one of the largest ever, precisely coinciding with Bitcoin’s inability to achieve a new high. This wave of liquidations has pushed many overleveraged traders out of the market, substantially diminishing open interest. Historically, significant liquidation events are often indicative of short-term market bottoms; however, given the current fragile sentiment, investors exhibit reluctance to make aggressive re-entries. The prevailing fear-driven atmosphere suggests that while a brief bounce back is feasible, overall confidence in sustaining the bullish trend has markedly diminished. Should Bitcoin close below the $100,000 threshold, it could signify a worrying turn for the cycle’s bullish trajectory, prompting deeper market corrections.
