Bitcoin is grappling with increased selling activity after slipping from a significant technical boundary, raising concerns of a potential market decline. The cryptocurrency’s failure to climb past the $90,000 threshold has heightened expectations of a possible drop to the $70,000 mark, drawing parallels with the sharp downturn experienced in 2018.
Can Bitcoin Overcome Resistance amid Selling Dynamics?
Recently, Bitcoin has struggled to break through the $94,000 to $98,000 range, a crucial resistance band. This failure, viewed as a critical technical indicator, signals a probable continuation of the downward trend. The collapse of key patterns in the technical analysis framework only reinforces this bearish sentiment.
Over the last week, Bitcoin’s value has slid by more than 6%, despite minor buying efforts. Key support levels have now shifted to $80,000, $75,000, and most crucially, $70,000.
“The technical analysis currently indicates a potential 22% decline, unless Bitcoin can reclaim a position above $92,000,” said Crypto Patel.
What Technical Signals Hint at a 2018-Style Downturn?
Resistance around $90,000, firmly held by the 50-day simple moving average, poses a significant challenge. Liquidity, exceeding $50 million above this price, complicates upward progress. The 21-day moving average at approximately $91,500 presents another hurdle inhibiting bullish recovery.
There’s a risk of a bearish crossover between these moving averages soon, potentially reaffirming the current downward trajectory. According to BitBull, with Bitcoin situated near the $87,500 decision point, attention may soon shift to $80,700 if this area succumbs to selling pressure.
The disparity between short-term and long-term investor positions underscores the prevailing pressure. Short-term holders, with costs above $96,000, are driven to sell, whereas long-term investors remain in profit, maintaining an average cost of $56,000.
- Bitcoin’s failure to surpass $90,000 heightens the likelihood of further declines.
- Resistance levels at $94,000-$98,000 remain formidable.
- Market sentiment mirrors the 2018 severe retracement phase.
The situation suggests Bitcoin may be entering its fourth consecutive month of downturns, echoing patterns last observed five years ago. Despite persistent monitoring, definitive signs of a market bottom remain elusive, keeping stakeholders cautious and attuned to upcoming economic indicators.
