Bitcoin (BTC) faced significant downward pressure this week, briefly falling below the critical support level of $92,000 on Monday. The decline was exacerbated by over $440 million in liquidations that swept through the market, reflecting a volatile trading environment.
After reaching a seven-week peak of approximately $94,400 on Tuesday, Bitcoin experienced a sharp drop to $91,540 before managing to recover slightly, stabilizing at $92,670 as of the latest updates. Analysts attribute this price action to profit-taking by short-term traders, who capitalized on the recent 12% surge from December lows near $84,500.
The latest data from CoinGlass highlights that nearly $441.5 million in positions were liquidated within a 24-hour period, with long positions accounting for $288.02 million. This automatic closure of traders” positions tends to amplify selling pressure, contributing to sharper price declines.
Adding to the bearish sentiment, institutional interest appears to have waned, with Bitcoin ETFs reporting net outflows of $243 million in just one day, as compiled by SoSoValue. This departure from the market follows a brief period of optimism after BlackRock“s IBIT saw its largest inflows in over three months.
Despite these challenges, the quick rebound of Bitcoin above the $92,000 mark suggests that the market”s underlying structure remains robust. The Crypto Fear and Greed Index has stabilized at a neutral level of 49, indicating that the recent price dip may have served more as a necessary liquidity reset rather than a panic-driven sell-off.
Technical Analysis of Bitcoin”s Price Movement
Examining the daily chart, Bitcoin has been forming a double bottom pattern, a bullish reversal signal that often precedes short-term price increases once confirmed. Currently, Bitcoin is struggling to maintain momentum past the $94,480 neckline of this pattern, resulting in a minor rejection.
Technical indicators are providing mixed signals. The Aroon Up indicator remains high at 85.71%, while the MACD lines have crossed above the zero line and are trending upwards, signaling potential bullish strength. A successful breakout could lead to a rally towards the $99,000 range.
However, should Bitcoin fail to break through the $94,400 resistance level, a retracement towards the $85,000 to $88,000 zone may be on the horizon, which previously served as a significant support level during December”s market correction.
