Bitcoin Downtrend and Market Sentiment
Bitcoin (BTC) has been experiencing a downward trend alongside the broader cryptocurrency market since November 3rd. On Thursday, BTC reached a six-month low of $88,267. With key economic data scheduled for Thursday and Friday, the market may witness significant price volatility around important Bitcoin price levels in the coming days.
The recent decline in Bitcoin's price has led to the loss of critical support levels, including the 50-week exponential moving average (EMA) around $100,000 and the yearly open at $93,300. This situation has created mixed sentiment among market participants regarding whether the current bull market has concluded or if Bitcoin is in the process of finding a bottom.
Technical Indicators and Support Levels
Private wealth manager Swissblock observed Bitcoin trading near $90,000, suggesting that the price has reached "cycle-level exhaustion." Their analysis, supported by a chart, indicated that Bitcoin's price momentum has fallen to levels previously seen during market bottoms in March and after the October 10th market crash.
"This is where bottoms build," Swissblock stated. "Reclaiming $97K–$98.5K flips momentum constructive, failing to do so hands bears full control."
Glassnode analysts echoed similar sentiments, noting that the area between $95,000 and $97,000, which aligns with the -1 STD short-term holder (STH) cost basis, is currently acting as local resistance. They added that reclaiming this level would be an early indicator of the market moving back towards equilibrium.
According to Daan Crypto Trades, Bitcoin needs to break above the local high of $94,000 to "break the current downtrend." This level represents a significant demand zone, where over 290,300 BTC were acquired, as indicated by Glassnode’s Cost Basis Heatmap.
Potential for a Short Squeeze to $100,000
Several traders are anticipating a liquidity grab around the $98,000 mark. Data from CoinGlass shows that Bitcoin's price is currently approaching liquidity levels near $92,000. A substantial amount of sell orders, exceeding $2.1 billion, are positioned between $96,600 and $98,500.
A break above the $98,000 level could trigger a short squeeze, potentially driving the price towards $100,000. Bitcoin trader AlphaBTC referred to the area between $100,000 and $104,000 as a "juicy area to target above the early November consolidation."
"Let’s see if $BTC can make an attempt back up there before Thanksgiving."
In related news, US spot Bitcoin ETFs recorded $75 million in inflows on Wednesday, ending a streak of outflows. This development suggests a potential early stabilization in the Bitcoin market.