Bitcoin has encountered renewed selling pressure after retreating from a critical technical threshold. With its price failing to surpass the $90,000 mark, the likelihood of a deeper market retracement increased. Technical indicators hint at the potential for the decline to extend to the $70,000 level. This current market outlook, analysts assert, resembles the rare and severe weakening phase witnessed in 2018.
Reversal from Key Resistance and Escalating Selling Pressure
Bitcoin has been unsuccessful in breaching the $94,000 to $98,000 range in recent weeks, which has acted as a strong resistance zone. The rejection at this level, monitored as a neckline in technical analysis, is considered a significant signal confirming this downward trend. Moreover, the inability to complete the head and shoulders pattern, followed by the breaking of a bear flag, further strengthened the technical basis for a downward movement.
In the past seven days, Bitcoin has depreciated over 6%, and short-term buying attempts have not resulted in a sustainable recovery. Market participants are observing the $80,000, $75,000, and $70,000 levels as interim and main supports. Analyst Crypto Patel highlights that the current technical breakdown points to a potential 22% retracement. The outlook remains negative unless the price can firmly reestablish above $92,000.
High-volume liquidations in derivative markets have also accelerated the decline. Sharp movements in global currency and U.S. bond markets have suppressed risk appetite, directly affecting cryptocurrencies. Investors are closely watching the upcoming U.S. Federal Reserve decision and the financial reports of major tech companies as critical short-term directional cues.
Technical Indicators and 2018-Like Warning Signals
Market data indicates that the 50-day simple moving average is proving to be a formidable resistance near $90,000. According to Material Indicators, liquidity exceeding $50 million just above this level complicates upward attempts. The 21-day moving average around $91,500 emerges as an additional pressure point for potential upticks.
In the coming month, there is a possibility of a downward crossover between the 21-day and 50-day moving averages. Such a scenario is traditionally considered a classical signal reinforcing the downtrend in technical analysis. BitBull claims the price is at a decision point around the $87,500 “Active Investor Mean” level, with the potential for the $80,700 mark coming into focus if this area is lost.
The average cost for short-term investors is above $96,000, increasing selling pressure at higher levels. Conversely, long-term investors remain profitable, given their average costs around $56,000. As noted by analyst Aman, Bitcoin faces the prospect of experiencing its fourth consecutive bearish month, a situation last seen in 2018. Market experts generally agree that strong evidence for a conclusive market bottom has yet to emerge.
