Bitcoin prices have taken a significant dip, dropping below key support levels and sending market sentiment into uncertainty. Traders are now closely monitoring the $98,000 mark, signaling potential for further losses. The leading cryptocurrency has struggled to reclaim its position above major trendlines after recently breaching them. TradingView data reveals that Bitcoin failed to regain its footing around the convergence of key moving averages between $108,000 and $112,000, causing a wave of selling activity.
This decline marks more than a mere correction. The price action has shifted structurally, with Bitcoin now trading below all crucial moving averages. The 200-day EMA has emerged as significant resistance, currently hovering near $108,200. Until the price closes above it, market momentum remains poised for further decline.
Further signaling a deeper correction is the recent movement of Bitcoin into the demand region between $100,000 and $98,000. This range has been a strong haven for rebounds throughout 2023. However, if this support zone fails to hold, it could open the door for more losses, potentially reaching the $92,000 level.
Market data reveals that significant spot outflows have occurred in recent days. These withdrawals suggest that investors are shifting their holdings towards exchanges, potentially indicating an intent to sell rather than accumulate. ETF inflows have also slowed considerably, indicating a weakening demand from institutional investors. This lack of robust investment flows further limits Bitcoin’s potential for upward movement.
Despite this market downturn, traders appear to be adjusting their positions in the futures market, with open interest dropping significantly to approximately $68.5 billion. This suggests that bears are actively unwinding their long positions. Short liquidations remain minimal, indicating a relatively calm sentiment among bearish investors.
Outlook
Bitcoin faces a pivotal moment. The recent drop below its trendline has shifted market sentiment decisively toward sellers. A swift recovery above $108,000 would signal a potential reversal and renewed optimism for further gains towards $120,000. However, failure to defend the key $98,000 support zone may confirm deeper correction, potentially opening doors to losses near $92,000.
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