Bitcoin is testing the $89,000 threshold amidst a persistent bearish market structure. Will it finally break out of the downward trend and reclaim $100,000? Explore market analysis and outlook.
After a strong rally over the weekend, Bitcoin finds itself at a technical crossroads. While this momentum has sparked hopes of a trend reversal, the underlying structure tells a more cautious tale that traders should not overlook.
Bitcoin (BTC) started the week with an impulsive move to the upside, breaking out of a short-term consolidation and sweeping liquidity above recent highs.
Indeed, as indicated by Zoral, Bitcoin turns bullish in the short term after breaking the bearish trendline. The liquidation of short Stop Losses above this line leads to an acceleration in the price.
However, the Bitcoin trend remains bearish until it breaks above the high protected by smart money at $99,400.
A legitimate trend reversal would require Bitcoin to surpass $99,500 convincingly, ideally supported by an increase in volume and momentum. Without this, the recent move is best viewed as a “stop hunt”, a hunt for stop losses and thus manipulation for smart money to sell at higher prices.
If the $86,000 level does not hold and the price starts to retreat, it opens the way for a liquidity sweep at $74,500, a level that has historically attracted demand but could be vulnerable in this context. Below that, the next significant support is at $67,850, marking a new lower low and confirming the ongoing bearish cycle.
According to analyst Checkmate, a drop below $65,000 (which corresponds to the average purchase price of all Bitcoin investors) would push holders into a selling panic, potentially driving Bitcoin towards $50,000 to $40,000.
In the bullish scenario, Bitcoin will face a significant liquidity zone at $96,000, which will be a tough resistance to break. Before that, $92,800 represents the average buying price of short-term holders and $90,000 the 100-day moving average. These are the two major resistances ahead.
Currently, Bitcoin is facing the top of the Ichimoku cloud on the daily chart and its 200-day moving average.
Overall, this setup calls for caution among traders. While the bullish movement may seem strong on smaller timeframes, it lacks confirmation on longer-term structures.
The closer Bitcoin gets to this $96,000 zone, the higher the likelihood of a short-term bearish reversal. $90 and $92,800 are the next areas to watch.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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