Bitcoin (BTC) Faces Increased Selling Pressure Near $90,000 Support
Bitcoin (BTC) continues its downward trend, trading near $90,000 due to ongoing market selloffs. With over 8% decline in the past week and diminishing institutional confidence, BTC risks further drops of up to $85,224 unless market dynamics shift positively.
Bitcoin (BTC) is experiencing a notable downtrend, with its price hovering near the critical support level of $90,000 amid ongoing market selloffs. Over the past week, BTC’s value has diminished by over 8%, eliciting significant concerns regarding its future movements. A declining interest from institutional investors and reduced purchasing activity may lead to BTC potentially falling below the $90,000 threshold in the upcoming days.
The analysis of the BTC/USD one-day chart indicates that Bitcoin is trading beneath the crucial red line of its Super Trend indicator, which is essential for assessing asset price trends. This situation suggests a bearish momentum alongside reduced buying pressure. Traders often interpret the price’s descent below this indicator as a bearish signal, advising caution for potential sellers.
Additionally, Bitcoin’s Smart Money Index (SMI) has been consistently decreasing since January 6, currently measured at 101,055—indicating a 10% drop during this timeframe. The SMI gauges the trading activities of institutional and seasoned investors, varying in response to market fluctuations during key trading hours. A rising SMI is indicative of greater investor confidence and buying activity, whereas a fall signals high selling activity and diminished investor confidence in Bitcoin.
Renowned crypto trader Peter Brandt recently made observations supporting this negative outlook by suggesting that Bitcoin may be forming a head and shoulders (H&S) pattern. This technical analysis pattern, traditionally viewed as a bearish signal, comprises three peaks, with the highest in the center (the ‘head’) surrounded by two lower peaks (the ‘shoulders’). Brandt identified three potential outcomes for the situation: completion of the H&S pattern transitioning toward its target price, the possibility of a bear trap, or evolution into a more complex price pattern.
The prevailing bearish trend indicates that Bitcoin may further decline, potentially dropping to the vicinity of $85,224. Alternatively, any significant shifts in the market could lead to a price surge, potentially reaching up to $102,538.
The recent decline in Bitcoin’s value can be attributed to a combination of market selloffs, wavering institutional participation, and diminishing demand among buyers. Such movements are critically observed through indicators like the Super Trend and the Smart Money Index, which provide insights into market sentiment and investor activity. Understanding these metrics is vital for predicting potential price fluctuations and market trends, particularly in a volatile environment like cryptocurrency trading.
In summary, Bitcoin’s price is currently in a precarious position, close to the critical support level of $90,000, with factors such as waning institutional confidence and decreasing demand posing risks for further declines. Technical analysis suggests bearish patterns forming, which indicates potential price targets of around $85,224 unless market conditions change favorably, propelling BTC towards $102,538.
Original Source: beincrypto.com
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