Bitcoin's price is rapidly declining amidst significant bearish sentiment in the market. The question remains whether the market can soon recover or if further decline awaits.
Technical Analysis
Technical indicators show Bitcoin's price rapidly declining, under pressure from key support levels.
The Daily Chart
On the daily chart, the asset has aggressively declined, breaking below the $90K level. This notable bearish trend began after a lengthy consolidation around $100K, which did not allow the price to continue higher. Currently, the cryptocurrency is testing the 200-day moving average, located around $82K, and the $80K support level. If these levels are broken to the downside, a much deeper drop could be expected, with the $63K support zone as a potential target.
The 4-Hour Chart
The 4-hour chart presents a terrifying image of the recent price action. However, the RSI shows a massive bullish divergence with the price, increasing the probability of at least a short-term rebound from the strong $80K support level. For a full recovery and continuation of the bull market, the market needs to break above $100K again.
On-Chain Analysis
The analysis indicates that the futures market has been responsible for most of Bitcoin's price volatility and sudden crashes over recent years.
Open Interest
This chart shows the open interest metric, which measures the total number of open futures contracts across all centralized exchanges. The OI is also dropping rapidly along with the price, indicating that a significant long liquidation cascade is occurring. While futures market cooldowns are necessary for a long-term sustainable uptrend, a deeper drop could complicate matters further as more liquidations occur.
In the near term, Bitcoin's price will depend on its ability to hold key support levels. If these levels are breached, further significant decline to $63K is possible.
