The Bitcoin price movements in the past 24 hours have sent the entire crypto market into another state of disarray and liquidations. Particularly, Bitcoin has witnessed a price crash of about 5% in the past 24 hours, which has seen it breaking below the $100,000 psychological price threshold again. Although Bitcoin eventually seems to be finding support around $96,000, the leading cryptocurrency is nonetheless down by about 10% in the past three days.
Interestingly, a technical analyst on the TradingView platform suggested that the Bitcoin decline is due to a broader trend in the investment markets, while also pointing to a potential price bottom during the current decline.
Bitcoin Price Declining Between Support Zones In Fibonacci Retracement Levels
Bitcoin’s current price action aligns closely with the Fibonacci retracement levels often used by traders to determine support and resistance. According to the TradingView analysis, the Bitcoin price is now within a retracement zone in the 4-hour timeframe between the 0.618 and 0.786 retracement levels from its recent all-time high of 108,135 which it achieved just three days ago.
Historically, this range has acted as a strong support zone where Bitcoin has demonstrated a tendency to bounce back. The analyst highlights that Bitcoin’s love of bouncing up at the 0.786 level suggests the cryptocurrency might find a temporary bottom near this range, which is situated just below the $95,000 price level.
As stated earlier, the Bitcoin price found support at $96,000, but Fibonacci retracements suggest it could further continue on the downside. The analyst suggested it could go down to around $93,800 as an overshoot. Any move lower, however, could risk a more significant collapse.
Correlation With Stock Index Sell-Offs
A key factor influencing Bitcoin’s recent decline is the sell-off in major U.S. stock indexes. Although the nature of the crypto industry is against that of the traditional finance world, the advent of Spot Bitcoin ETFs has led to a close relationship between the two. This has caused Bitcoin to become more sensitive to movements and sentiment in traditional markets.
As noted by the analyst, the S&P 500 Futures, Nasdaq Futures, and Dow Jones Futures all recently experienced a significant pullback from the 1.618 Fibonacci reverse extension levels on the weekly candlestick timeframe. This connection is further emphasized by data showing substantial outflows from Spot Bitcoin ETFs based in the United States. According to data from SosoValue, these ETFs witnessed $680 million in outflows on December 19 to break the trend of 15 consecutive days of inflows.
At the time of writing, the Bitcoin price is trading at $97,950, hovering just above the critical $96,000 support level. However, as stock indexes remain under bearish pressure, there is a risk that the Bitcoin price will continue to track these declines and maybe even bottom around $93,800 before regaining another momentum upwards.
You can get bonuses upto $100 FREE BONUS when you:
💰 Install these recommended apps:
💲 SocialGood - 100% Crypto Back on Everyday Shopping
💲 xPortal - The DeFi For The Next Billion
💲 CryptoTab Browser - Lightweight, fast, and ready to mine!
💰 Register on these recommended exchanges:
🟡 Binance🟡 Bitfinex🟡 Bitmart🟡 Bittrex🟡 Bitget
🟡 CoinEx🟡 Crypto.com🟡 Gate.io🟡 Huobi🟡 Kucoin.
Comments