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After a historic rally, Bitcoin faced its first major setback, falling 7% from its all-time high of $99,800. This follows an impressive rally from $67,500 on November 5, representing a rise of almost 50% in just a few weeks. The price action was largely “bullish only”, attracting significant interest from traders and investors alike.
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However, the current decline highlights growing caution in the market. Market caution said leverage levels remain high despite recent efforts to reduce leverage. Adler’s analysis reveals that increased short positions and consolidation below the $100,000 psychological level contributed to the rebound.
While Bitcoin’s performance remains strong in the broader context, this decline signals a potential shift in market sentiment. The question is whether BTC can gather enough momentum to cross the $100,000 mark or whether there is further consolidation on the horizon.
Many investors consider this pullback to be a healthy pause in an upward cycle, but high leverage levels indicate continued volatility. All eyes are on Bitcoin as it navigates this critical phase, and the next few days will likely determine its short-term direction.
The emergence of bears from Bitcoin
After three weeks of minimal resistance from bears, they are showing signs of a resurgence as Bitcoin struggles to surpass the $100,000 level. This critical price point, which many believed would serve as a springboard to further gains, instead highlighted growing bearish sentiment. According to CryptoQuant analyst, Axel AdlerRecent price action indicates a potential shift in momentum.
Adler’s analysis of X reveals that despite the recent wave of deleveraging, leverage levels in the market remain high. Several major long positions were established around the $93,000 mark, offering bears the opportunity to profit as BTC failed to rally. This level has now become a battleground, as Bitcoin’s inability to maintain upward momentum indicates the potential for further downside risks.
Bitcoin price is hovering around this key level, increasing the possibility of a correction towards $88,500 or a prolonged sideways consolidation below $100,000. Such a scenario would impact Bitcoin and set the tone for altcoins’ performance in the coming weeks.
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The next two weeks will be pivotal as market participants closely monitor Bitcoin’s price movement. A decisive move, whether up or down, will shape the overall cryptocurrency landscape and determine whether this is just a pause in a larger rise or the beginning of a deeper correction.
BTC is testing new demand
Bitcoin is trading at $93,500 as bears regain control after hitting an all-time high last Friday. This bounce represents a shift in momentum, but bulls can still regain dominance if the price remains strong above the critical support level of $92,000. Holding this level would keep Bitcoin’s price action structurally bullish and indicate resilience in the face of increasing selling pressure.
If Bitcoin maintains its strength above $92,000, the short-term outlook remains optimistic, with another attempt to break key resistance levels likely. However, a decline below this mark would indicate short-term weakness, which could lead to further declines. The next critical level to watch will be around $84,000, where the 4-hour 200 EMA is in line as a support area.
This level represents a major line in the sand for bulls. A break below this level may accelerate downward momentum, extending the correction and dampening market sentiment. On the other hand, holding above $92,000 would boost bullish confidence, paving the way for a recovery and possible pullback towards previous highs.
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Traders and investors are watching these levels closely, as Bitcoin’s ability to stay above $92,000 will determine whether it will remain in a short-term bullish structure or succumb to bearish pressures.
Featured image by Dall-E, chart from TradingView