Bitcoin Faces Major Deleveraging – Analyst Explains Price Crash Below $100K
Bitcoin experienced significant selling pressure after successfully crossing the $100,000 mark, a psychological milestone that filled investors with optimism. However, the celebrations were short-lived as BTC failed to hold this key level, falling to $92,500 in less than three days. This sharp decline has reignited concerns about market stability and Bitcoin’s ability to sustain upward momentum.
Related reading
Renowned CryptoQuant analyst Axel Adler has shared valuable insights into recent market activity. He revealed that the largest deleveraging in the past week occurred between January 6 and 7, when the price of Bitcoin fell from $102,000 to $100,000 due to liquidations. This wave of forced selling pushed the price lower, allowing bears to regain control and push Bitcoin prices further down to $92,500.
current market conditions Leaving investors questioning Bitcoin’s next move. Will it stabilize and find support and bounce again, or will the bearish momentum lead to a deeper correction? With market sentiment swinging between fear and cautious optimism, all eyes are on Bitcoin as it moves through this critical phase.
Bitcoin regains its footing after sharp sell-off
Although Bitcoin has experienced a significant decline, falling to $92,000, the cryptocurrency has managed to find critical support at this critical level. In the past few hours, Bitcoin has surpassed this threshold, climbing to $95,000, providing a glimmer of hope for bullish investors. The ability to hold and bounce off this support level indicates underlying resilience, but uncertainty remains.
Renowned CryptoQuant analyst Axel Adler shared insights on recent market dynamics on X. He pointed out that the largest deleveraging last week occurred between January 6 and 7, when the price of Bitcoin fell from $102,000 to $100,000 due to a wave of liquidations. This liquidation event eliminated overleveraged positions and set the stage for bearish activity. Bears took advantage of the chaos and opened short positions, further driving the price down to $92,000.
Despite the recent recovery, Adler warned that the current decrease in open interest (OI) by 9K BTC does not provide a clear signal of easing market stress. This makes Bitcoin’s next move uncertain, with investors keeping a close eye on price action in the coming days.
Related reading
A recovery back to $95,000 is a positive sign, but BTC must recover higher to confirm bullish momentum and stabilize the market. Until then, traders remain cautious as the possibility of further volatility looms.
BTC holds key levels: Bullseye higher
Bitcoin is currently trading at $95,000, holding above key support and just 2% below the 4-hour 200 EMA of $96,200. Another important indicator, the 200 moving average, is 3% away, further adding to the importance of Bitcoin’s current position. These technical levels are critical for assessing short-term market momentum and a potential bullish recovery.
For bulls to resume the uptrend, $95,000 levels must be held as a basis for further gains. A decisive push to recapture the $98,000 and $100,000 levels is crucial. These price points are key resistance levels that, if breached, could set the stage for a strong move higher, paving the way for Bitcoin to return to all-time highs.
Failure to hold $95,000 could increase bearish pressure, which could lead BTC to enter a deeper consolidation or even test lower demand areas. However, sustaining current levels and building momentum could restore investor confidence and create the conditions needed for a sustained rebound.
Related reading
As Bitcoin consolidates, traders and analysts are keeping a close eye on these key levels to gauge the cryptocurrency’s next move. A break above the $100,000 mark could reignite bullish sentiment and set a clearer direction for the market.
Featured image from Dall-E, chart from TradingView
