- Bitcoin falls below $100K, with $93K as the next key support level, signaling a continued bearish trend.
- Backwardation in Bitcoin futures suggests short-term market panic, but could point to a local bottom.
- With the 365-day moving average at $83K, Bitcoin may find crucial support for a potential rebound.
Bitcoin (BTC) has declined significantly to below the 100K mark at its current price of 99.1K. With the steep decrease of the cryptocurrency, there have been worries about a new negative trend. Having struggled to break $105K, Bitcoin now has traders looking at the next support level at the 93K mark. The situation will continue to look bearish unless the level is reclaimed.
Crypto Patel emphasized that the $105K mark has turned from a support zone to a resistance zone. To prevent further slides, Bitcoin needs to breach this level. Market analysts are forecasting that before then, there is a possibility of Bitcoin slumping to as low as 80 K. The market has a cautious tone as investors are hoping that bulls can stage a recovery.
Source: X
Bitcoin Futures in Backwardatio
The performance of BTC on Coinbase has gone into backwardation on the futures market. This is a situation where futures price is lower than the spot price. Backwardation can be an indicator of short-term panic and panic among traders. It may show the bottom of a market sometimes, but without any structural confirmation, it is difficult to declare a bottom just yet.
The backwardation on the BTC futures is a sign of the pessimist nature that has been creeping into the market. Futures prices are getting pushed down, and that shows nervousness that traders are feeling. This form of market action tends to imply that traders are expecting additional downside risk in the short-term. This trend though, may also be an indication of a local bottom in case of the development of the market.
BTC’s $83K Support: Key to a Potential Rebound
The 365-day moving average of BTC was revealed by More Crypto Online to have strong support in the past year. This moving average is now near the $83,000, and this can be considered a major support line. This may come to the rescue of the price of BTC in case the current decline persists. Nevertheless, the actual test will be to see whether BTC can manage to trade above this price and stabilize.
Source: More Crypto Online
Current price action does not have more downside potential, but a rebound is also possible, and there are indications to that effect. A 365-day moving average used to indicate a stable price level in the past. With Bitcoin clinging to this price, it could form the basis of a bullish recovery in the foreseeable weeks.
The market players will be waiting to receive a major structural call before taking serious actions. Although some may regard the backwardation in futures as a sign of the possible bottom, it does not necessarily mean that the price will rise soon. The traders will have to wait longer to confirm whether there is any reversal before taking any action.
The status quo of Bitcoin in the market is not rosy, though a turnaround is not out of the realm of possibility. The next action of the market depends on the effectiveness with which it manages to hold key support parameters such as the 365-day moving average. Investors will be keen on whether the price will remain or a deeper correction will take place.
The market remains skeptical after Bitcoin slumped below $100,000. The next important level to focus on is the support at $93,000. Failure of Bitcoin to maintain this support is most likely to result in further price declines. Bitcoin will continue to be in the bearish category till a distinct structural reversal has been observed.
Read More: Bitcoin Faces Liquidations Amid Market Shift: Should Traders Be Concerned?
