Bitcoin dropped 3.62% to $102,666 after Moody’s downgraded the US credit rating. Bearish signals point to a test of $100K, with support at $95K to $91K.
With Moody’s downgrade of the US credit rating from AAA to AA1, there has been a major pullback in both the US and crypto markets.
The agency cited the ballooning $36 trillion national debt and rising interest costs as key drivers behind the cut, its first since assigning the U.S. a top-tier “Aaa” rating in 1919.
Today, Bitcoin is down 3.62%, trading at $102,666. Will this intraday pullback lead to a breakdown of the $100,000 milestone?
Bitcoin Price Analysis
Bitcoin’s daily chart highlights a strong price reversal from the 50% Fibonacci level near the $75,500 supply zone, resulting in a near 40% rise, with the recent 24-hour high at $107,115.
However, the intraday pullback undermined Sunday’s 3% gain, forming a bearish engulfing candle.
Increased supply pressure due to broader market fears, uncertainty, and doubt has caused short-term panic. The bearish engulfing candle forms near the strong overhead supply zone around the $106,000 mark, threatening a potential bearish trend reversal.
Supporting the downside risk, the MACD and signal lines have given a bearish crossover. According to the price action, the immediate support lies at $98,349 if the $100,000 psychological support level fails.
However, the Fibonacci levels indicate stronger support at $91,780, at the 78.60% level. This suggests a downside risk of nearly 10%. Additionally, a crucial support level exists at $95,269, marked by the 50-day exponential moving average. The dynamic average support is known for providing strong support, helping maintain the uptrend.
Conversely, a potential reversal in the short-term price trend could push Bitcoin to a new all-time high, surpassing the $109,356 level. The Fibonacci levels suggest an upside potential to reach $127,800 at the 1.272 level.
Liquidations Spike as Bitcoin Futures Open Interest Drops After Crossing $70 Billion
Following the intraday pullback, the derivatives market saw a sharp shift in trading activity. Earlier today, Bitcoin open interest reached a new all-time high of $70.03 billion before pulling back to $67.54 billion. This suggests a significant decline in bullish sentiment due to the intraday pullback.
Over the past 24 hours, short liquidations in Bitcoin rose to $93.81 million, while long liquidations totaled $81.97 million. The intraday pullback led to a sharp drop in bullish sentiment in the derivatives market.
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