Bitcoin 
$78,121 has recently descended below important support levels after reaching a new peak at the beginning of this month. Daily and short-term technical indicators reveal a prevailing selling pressure within the market. This situation heightens the probability of Bitcoin’s retreat towards the psychological threshold of $100,000.
Bitcoin’s Technical Indicators Signal a Downward Trend
On the daily chart, Bitcoin’s price has fallen outside the long-followed descending channel, slipping below both the $110,000 support and the 100-day moving average. The loss of these two levels has led investors to consider a potential deeper pullback. According to analyses, the next support level is highlighted as the fair value gap around $104,000 and the 200-day average near $100,000.
The Relative Strength Index (RSI) remaining below the 50-level indicates sustained selling pressure, suggesting that the momentum is controlled by the bears. The dominance of the bears suggests that the strongest scenario is the continuance of the downward movement in price.
A similar weakness also stands out in the four-hour chart. The price is testing the lower levels of a narrow descending channel in the short term. Previously, the supports at $117,000 and $110,000 were broken and retested, strengthening the possibility of the leading cryptocurrency gravitating towards the fair value gap around $104,000. In alignment with the Fibonacci retracement levels, this region also stands out as a significant threshold for a potential reaction.
Significant Decline in Exchange Reserves
On-chain data presents a different picture. Since the start of 2024, the Bitcoin reserve on exchanges has been steadily declining. As the reserves, shown as a purple line in the charts, persistently decrease while the price, depicted in white, climbed to new record levels, investors have been responding by withdrawing their BTC from exchanges to cold wallets, causing the price to react and ascend.
This contraction on the supply side supports the market’s long-term outlook, as the quantity of BTC available for sale decreases. When demand remains stable or increases, it sets the stage for the price to move upward again. Yet, short-term corrections are inevitable, especially during periods when demand weakens or macro conditions change.
