Bitcoin's price has been steadily hovering around $104,000, nearing a significant psychological threshold. However, the leading cryptocurrency is currently in the midst of a sharp decline. With minimal structural support remaining below, Bitcoin is facing increased downside pressure. A recent CoinGlass BTC/USDT liquidation heatmap reveals concentrated liquidation clusters just beneath the current price, adding to the bearish sentiment in the market.
The most pressing concern for Bitcoin traders lies in a dense liquidity pocket between $103,000 and $104,000, which is now being tested. If this zone breaks down, the next major liquidity bands could be found between $101,500 and $100,000. These levels are likely to be filled with stop-loss orders and leveraged positions, heightening the risk of further downside.
Technical Indicators Point to Weakening Momentum
From a technical standpoint, Bitcoin’s daily chart shows a fragile structure. The 50-day and 100-day moving averages have already rolled over, while the price has dropped below the critical 200-day moving average. This shift typically signals the onset of bearish momentum and could spell trouble for the cryptocurrency in the short term. Furthermore, the Relative Strength Index (RSI) has fallen to approximately 35, indicating that Bitcoin is nearing oversold territory. However, some experts suggest that more capitulation may occur before a true reversal setup materializes.
In the ongoing sell-off, Bitcoin has seen a significant uptick in volume, showing that the decline is well-attended by traders. This heightened trading activity raises the likelihood of a swift liquidity sweep below $100,000. The lack of clear horizontal support beneath this level suggests that Bitcoin could face a rapid descent, with the next support zone likely lying between $97,000 and $98,000.
Critical Support Zones to Watch
The key levels to monitor are the $100,000 mark, $101,500, and $103,000. Losing these levels could trigger a steep decline, potentially the most significant drop for Bitcoin since its summer rally. As the cryptocurrency faces mounting pressure from both technical and on-chain indicators, market participants are bracing for a challenging few days ahead. Should Bitcoin fail to reclaim higher levels, the downside risks may continue to dominate the market sentiment.