Bitcoin in Troubled Waters : Analysis of the Current Fall
As investors hoped for a sustained recovery of Bitcoin, the leading cryptocurrency is facing a new phase of turbulence. After reaching its recent peak above $108,000, BTC has undergone a significant correction, dropping to $106,000. This sudden decline, coupled with concerning technical signs, fuels fears of an imminent collapse.
Technical Signals and Key Levels
The Bitcoin had broken its protected high at $108,400, indicating a short-term bullish reversal. However, geopolitical announcements once again cast a shadow over the market.
The Bitcoin is currently heading towards its 4H POC at around $105,300, which could be a short-term rebound zone. If BTC fails to maintain this level, it could then liquidate its bullish trendline at $105,000 to target either the range between $101,300 and $103,000 or between $100,000 and $98,000 in the case of a more pronounced downward trend.
Another concerning factor is the increasing correlation between Bitcoin and traditional financial markets. While the cryptocurrency was once considered an independent asset, it now appears to be more influenced by fluctuations in stock indices. This heightened synchronization with stock and other risky asset movements increases Bitcoin’s vulnerability to economic disruptions.
Could Bitcoin Experience a Crash ?
Despite these early signs of a new bearish phase, it would be premature to predict Bitcoin’s fall. The cryptocurrency has weathered numerous crises in the past and has bounced back each time. However, investors must remain vigilant and prepare for potential upcoming turbulence.
A correction remains possible if the bullish momentum weakens. A drop below $100,000 could push the price towards $93,000 – $95,000, although this scenario seems unlikely in the short term given the current conditions. Technical indicators, such as the RSI (Relative Strength Index), suggest that Bitcoin is not yet in overbought territory, allowing room for further upside.
On the other hand, on-chain data shows long-term holders’ confidence in BTC. According to the graph indicated by Axel, LTHs are still in an accumulation phase despite the panic. “In three out of four similar previous cases, such LTH behavior has led to a Bitcoin growth of 18 to 25% in the following 6 to 8 weeks,” Axel writes.
Furthermore, he explains that the CDD chart indicates that experienced investors are no longer selling, reinforcing the idea that BTC should stay above its key support levels in the coming days or weeks.
In summary, despite the panic and increased volatility, on-chain data and Bitcoin’s past resilience support the notion that BTC should recover soon from this geopolitical crisis.
