Why are Bitcoin and Altcoins retracing today? Market analysis

Tensions return to the markets 

The crypto market is going through a turbulent phase as the price was rejected from its 200 day moving average at $82,400. After reaching a weekly high, Bitcoin (BTC) suffered a sharp correction, dropping back to around $79,600. This downward movement follows renewed geopolitical tensions, prompting investors to flee risk.

In this uncertain climate, Dogecoin (DOGE) is taking a significant hit. The famous memecoin plummeted by nearly 4%, trading around $0.106. It is leading the losses among major cryptocurrencies, confirming its high volatility during periods of market stress.

However, DOGE is displaying a 3 day bullish order block at lower levels. This indicates massive accumulation of DOGE by smart money. No other token in the top 20 has this kind of bullish signal. In this context, DOGE could reach $0.14 or $0.17 in the coming months. This represents an increase of between 30% and 60%.

Negative funding rates: A hidden bullish signal?

The most striking information from this drop lies in the derivatives data. According to K33 Research, crypto futures markets have just recorded their 67th consecutive day of negative funding rates. This is the longest bearish streak observed in a decade.

In practical terms, this means that traders betting on a decline are paying those betting on an increase to maintain their positions. While this dynamic illustrates prevailing pessimism, it paradoxically represents an ideal setup for a massive short squeeze.

Indeed, a significant accumulation of short positions creates abundant upside liquidity. If Bitcoin manages to bounce back and break a key resistance, these sellers will be forced to buy back their positions, which could cause prices to skyrocket toward a new ATH.

Is Bitcoin’s key support in danger?

From a technical perspective, Bitcoin is at a crossroads. The $78,500 level is currently acting as a major psychological and technical support. If this threshold gives way under selling pressure, a deeper retracement toward the $76,000 zone cannot be ruled out.

Indeed, Bitcoin is showing a 6 hour bearish order block. Selling pressure is therefore significant and could push the price of BTC lower over the next 48 hours before potentially finding its bottom.

However, indicators like the RSI show that selling pressure could soon run out of steam. To reignite a bullish rally, BTC will imperatively need to break through the $82,900 resistance, a level that violently rejected the price this week.

As for Dogecoin, the situation is equally critical for buyers. The token must absolutely hold its support at $0.10 to avoid a more severe drop. A breakout above $0.115 would be necessary to reverse the current trend.

Is it a good time to buy Bitcoin?

Faced with this ten year record in funding rates and the current drop, traders are wondering if the market is offering a golden opportunity. Historically, prolonged periods of negative sentiment often precede exceptionally violent bullish movements.

Can Bitcoin shatter its recent resistances and soar to new heights once geopolitical tensions ease? The key will lie in the buyers’ ability to absorb the current pressure without breaking vital supports. The coming days will be decisive in confirming whether this drop was merely a bear trap before the next major crypto market bull run.

Sources:

• CoinDesk
• TradingView

Related Articles:

• Coinbase outage: What’s happening to the Crypto market?
• Why this trader is betting big on Ethereum
• XRP: UBS reveals holdings, Is a price surge imminent?