Bitcoin has fallen below $105K as bearish divergence and weak derivatives data signal a deeper correction ahead.
As Bitcoin dips below the $105,000 mark, declining bullish momentum warns of a steeper correction beneath a crucial support trendline. Could this potential breakdown push Bitcoin back to the $100,000 level?
Bitcoin Price Analysis
Bitcoin’s four-hour chart showcases a bullish failure to cross above the $112,000 level, creating an all-time high at $111,970. With multiple lower highs, Bitcoin is back at a crucial support trendline as it breaks under the 50 and 100-period EMAs.
According to Fibonacci levels, the decline breached the 23.60% retracement level at $107,545. Additionally, the sudden pullback is signaling a potential bearish crossover between the 50- and 100-period EMAs.
Currently, Bitcoin trades at $104,639, reflecting a drop of more than 6% from the all-time high. As the price falls, the daily RSI line has turned bearish, moving below the midpoint. This reflects waning bullish momentum and raises the likelihood of a breakdown.
Based on Fibonacci levels, a potential close below the support trendline at $103,534 would increase the chances of a deeper correction. However, several support levels lie nearby, including the 200-period EMA at $103,230 and the 50% Fibonacci level at $102,795, which could potentially absorb selling pressure.
That said, a breakdown below the 50% Fibonacci level could open the door for Bitcoin to retrace toward the $100,000 mark, with the final line of defense at the May low of $101,763.
Conversely, a bounce from the support trendline could lead to a retest of the 23.60% Fibonacci level at $107,545.
Derivatives Data Suggests Drop in Optimism
With the pullback in the Bitcoin spot price, CoinGlass data shows a 0.84% drop in open interest, now at $70.59 billion. Over the past 24 hours, declining interest among derivative traders has resulted in the liquidation of $35.88 million in long positions, while short liquidations remain limited at $7.20 million.
Additionally, the funding rate has declined to 0.0020% from a recent high of 0.0047%, signaling a significant reduction in bullish trading activity. As a result, the derivatives market is showing a notable increase in bearish sentiment.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
