Monitor Bitcoin price levels amid recent drop.

Table of Contents

Crucial Results

Early this week, Bitcoin (BTCUSD) jumped beyond $100,000, but as investors reevaluate this year’s interest rate outlook, the price has fallen in subsequent days.

Stronger-than-expected economic data has caused Treasury yields to rise, which has put downward pressure on riskier assets like bitcoin as investors worry that the Fed may not lower interest rates again. As a result, the cryptocurrency has lost momentum.

Significantly, spot Bitcoin exchange-traded funds (ETFs) saw their second-largest daily withdrawals since they started trading in January, suggesting that institutional investors are wary of the asset class.One

Over the past year, Bitcoin has more than doubled in value. Since November’s election, the cryptocurrency has increased by almost 33% as investors hope that a more favorable regulatory environment will be paved by the new Trump administration and a Congress that is supportive of cryptocurrencies.

Late Thursday saw Bitcoin trading around $93,500, down a little from the previous day and much below Monday’s weekly high of almost $103,000. In mid-December, the cryptocurrency reached its highest point ever, at over $108,000.

The technicals of the bitcoin chart are broken down below, along with key price levels to be aware of.

The New Year Rally Is Halted by a Bearish Engulfing Pattern

There has been a lot of selling pressure on bitcoin’s price since it reached its all-time high (ATH). More recently, the price of the cryptocurrency stopped last week’s surge back over the highly anticipated $100K mark by forming a bearish engulfing pattern.

Furthermore, the price has sharply declined below the reputable 50-day moving average (MA) and the relative strength index (RSI) has slipped below the 50 barrier, all of which indicate waning buying enthusiasm.

To find important support and resistance levels that investors will probably be paying close attention to, let’s look at the bitcoin chart.

Important Support Levels to Monitor

About $92,000 is the initial support level to consider. The lower trendline of a possible new descending channel that is building on the chart, as well as the late-November retracement low and December bottom, may provide purchasing activity in this area.

Bitcoin bulls may look for entry chances beneath a pennant pattern that preceded the cryptocurrency’s run to its record high, while selling below that level might result in a fall down to the $87,000 mark.

If this level is decisively closed below, a decline to about $74,000 is possible. Investors with longer time horizons may want to buy bitcoin in this area around the 200-day MA and notable peaks in March and October. A move like that would indicate 

Crucial Resistance Levels to Keep an Eye on

Although this region of the chart may offer overhead resistance close to a number of recent peaks and the top trendline of the descending channel, returning bullish momentum might see another assault at the psychological $100K milestone.

A retest of the crucial $106,000 barrier can be triggered by buying over this level. Traders who purchased the most recent downturn can try to lock in gains at this level.

FAQ

The drop in Bitcoin’s price is attributed to stronger-than-expected economic data that raised Treasury yields, leading to concerns that the Federal Reserve might not lower interest rates further. This has pressured riskier assets like Bitcoin and reduced buying momentum.

Investors should watch for key support levels around $92,000, $87,000, and $74,000. These levels are tied to historical lows, trendlines, and the 200-day moving average, making them critical points where buying activity might increase.

The main resistance levels to monitor are $100,000 and $106,000. A break above these levels could signal a renewed bullish trend, with $106,000 being a significant barrier tied to previous highs.

The bearish engulfing pattern suggests strong selling pressure, as it reversed the recent surge above $100,000. This pattern, combined with a dip below the 50-day moving average and weakening RSI, indicates declining buying enthusiasm.

Institutional investors appear cautious, as evidenced by the second-largest daily withdrawals from spot Bitcoin ETFs since their launch. This reflects a broader sense of uncertainty in the asset class amid fluctuating market conditions.

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