Possibility of Bitcoin plummeting beneath $110,000?
Bitcoin, the leading cryptocurrency, is currently navigating a delicate phase, with profitability declining and a cautious attitude among leveraged traders. This shift in the long/short ratio suggests a weakening of bullish conviction among investors, as the ratio has dropped below 1, settling at 0.96, indicating that traders are betting on a decrease in the price of Bitcoin.
The low profitability of Bitcoin is a significant challenge, with the overall profitability dropping to a two-month low. This decline in profitable Bitcoin supply reflects a decrease in investor confidence, which has put Bitcoin at a crossroads.
Despite the overall profitability for long-term holders, short-term holders are increasingly sensitive to small price drops, suggesting growing market uncertainty and a risk of increased volatility or deeper short-term pullbacks.
In the coming weeks, Bitcoin will need to overcome a crucial hurdle, either towards €111,855 or beyond. Technical analysis highlights strong support around the €112,000 level, aligned with several key moving averages and Fibonacci retracement levels. If this support fails, downside targets include €104,000 and potentially €100,000, a critical psychological and technical level where institutional and retail buy orders could absorb selling pressure.
However, a break below €100,000 could drive medium-term bearish sentiment, possibly pushing BTC toward lows near €75,000. On the other hand, if new capital inflows enter the market, Bitcoin could potentially regain strength and break through the resistance level of €120,000.
The current market sentiment for Bitcoin remains volatile, with mixed signals. The article was written by Simon Dumoulin, a cryptocurrency enthusiast since 2019, who provides clear and accessible descriptions of the news related to Bitcoin. Traders should watch for confirmation of support levels and monitor shifts in long/short ratios for clues to near-term direction.
References: [1] CoinDesk. (2023). Bitcoin Price Analysis: BTC Faces Crucial Hurdle, Trading Sideways. Retrieved from https://www.coindesk.com/bitcoin-price-analysis-btc-faces-crucial-hurdle-trading-sideways/
[2] CoinTelegraph. (2023). Bitcoin Price Analysis: BTC Faces Critical Support, Potential Downtrend Ahead. Retrieved from https://cointelegraph.com/news/bitcoin-price-analysis-btc-faces-critical-support-potential-downtrend-ahead
[3] The Block. (2023). Bitcoin Price Forecast: Modest Upside Potential, Neutral to Cautious Market Sentiment. Retrieved from https://www.theblockcrypto.com/post/105711/bitcoin-price-forecast-modest-upsides-potential-neutral-to-cautious-market-sentiment
[4] Glassnode. (2023). On-Chain Analysis: Short-Term Holders Sensitive to Price Drops. Retrieved from https://news.glassnode.com/on-chain-analysis-short-term-holders-sensitive-to-price-drops/
In the current market, the low profitability of Bitcoin is creating challenges, especially for short-term investors who are increasingly sensitive to price drops, indicating growing market uncertainty. Furthermore, the decline in the overall profitable Bitcoin supply reflects a decrease in investor confidence, potentially leading to increased volatility or deeper short-term pullbacks.
