Bitcoin's 'Bear Market' Confirmed: Key Price Levels to Watch
Bitcoin's on-chain data suggests the market is entering a macro downtrend, with key support levels in focus. Here's a breakdown of the current situation and what to expect next.
The Bear Market Signal
Bitcoin's price has fallen to four-month lows, with analysts confirming a transition into a bear market. This is supported by on-chain data, which shows a decline in monthly funding paid by longs in Bitcoin perpetuals, indicating reduced bullish leverage.
Psychological Support Level
The psychological level at $100,000 remains a critical support point. However, Bitcoin has already dropped below the short-term holders' cost basis of around $113,000, a level that typically precedes mid-term bearish phases.
Key Support Levels
- $99,000 (75th Percentile Cost Basis): Historically, this level has provided support during pullbacks.
- $98,000 (Liquidation Heatmap): A high concentration of liquidations near this level suggests it's a key support point. Breaking this level could trigger a liquidation squeeze, driving prices to $95,000.
Upside Potential
On the upside, ask orders are accumulating around $102,500, with the next significant cluster between $103,000 and $105,000.
Market Sentiment and Capital Flows
- Stablecoin Preference: A breakout in USDT dominance would signal rising stablecoin preference, indicating risk aversion and capital exiting Bitcoin and other cryptocurrencies.
- Short-Term Pressure: This shift in stablecoin preference will typically pressure Bitcoin's price downward in the short term, reflecting bearish crypto market sentiment.
Potential Price Drop
Selling by long-term Bitcoin holders, capitulation by short-term holders, and a daily candlestick close below the $100,000 psychological level could push Bitcoin's price down to as low as $72,000.
Disclaimer
This article is for informational purposes only and does not constitute investment advice. Every investment and trading decision involves risk, and readers should conduct their own research before making any moves.
