In the last 24 hours, Bitcoin has taken the crypto market on a rollercoaster ride, leaving traders in a state of confusion and prompting a wave of liquidations. Over this period, Bitcoin’s value has plummeted by roughly 5%, dipping below the crucial $100,000 mark once more. It appears to be stabilizing at around $96,000, yet it’s crucial to note that Bitcoin has dropped roughly 10% over the past three days.
A technical analyst on TradingView posits that Bitcoin’s recent dip can be attributed to a larger trend permeating the investment markets. Interestingly, the analyst also indicates that this downturn might soon hit a price bottom.
When examining Bitcoin’s current price dynamics, they fit snugly within the Fibonacci retracement levels—a tool traders frequently use for spotting support and resistance. An analysis on TradingView shows that Bitcoin is oscillating within a retracement zone on the 4-hour chart, ranging between the 0.618 and 0.786 levels from its recent peak of 108,135, achieved a mere three days ago.
Historically, this zone has been a reliable cushion where Bitcoin tends to rebound. The analyst notes that Bitcoin often sees a bounce at the 0.786 level, suggesting we might see a temporary price floor here—right below $95,000.
Currently, Bitcoin seems to have settled near $96,000, but Fibonacci retracement hints still point to the possibility of further descent, possibly reaching around $93,800 in an overshot scenario. A deeper plunge, however, could herald more intense ramifications.
Another contributing factor to Bitcoin’s recent slide is the sell-off seen in major U.S. stock indexes. While cryptocurrencies generally operate independently of traditional financial systems, the emergence of Spot Bitcoin ETFs has intertwined their fates to a degree, making Bitcoin more susceptible to fluctuations in conventional markets.
As the analyst observes, S&P 500 Futures, Nasdaq Futures, and Dow Jones Futures have all recently pulled back from the 1.618 Fibonacci reverse extension levels on a weekly basis. This association is highlighted by significant outflows from U.S.-based Spot Bitcoin ETFs. Data from SosoValue reveals these ETFs recorded $680 million in outflows on December 19, breaking a 15-day streak of consistent inflows.
Presently, Bitcoin is trading at $97,950, barely clinging to the vital $96,000 support threshold. With stock indexes under continuous bearish pressure, there is a looming risk that Bitcoin might mirror these downward trends, potentially descending to around $93,800 before gathering steam for another upward drive.
Source: BTCUSD on Tradingview.com
Image provided courtesy of Dall.E, chart sourced from Tradingview.com.
