Bitcoin Price Falls Below Critical Support
Bitcoin, the world’s largest cryptocurrency, has slipped below a key support level, creating uncertainty for traders and investors. After weeks of sideways movements, the market has entered a volatile phase with selling pressure increasing. This decline raises questions: Is this a sign of further weakness or a buying opportunity?
Current Market Analysis
In the past 24 hours, Bitcoin dipped below $111,500, marking its lowest level in nearly two months. This drop increases the probability of testing critical levels at $107,000 and $104,000. On-chain data reveals that short-term holders (STHs) are under stress. Their cost basis, around $107,000, is now being challenged. Additionally, approximately 8.8% of Bitcoin’s circulating supply has an average entry price of $113,600, leaving many holders already at a loss.
Derivatives markets also reflect this weakness. Amid muted spot market volume, open interest remains low, indicating shallow liquidity. Furthermore, institutional flows are showing caution. Bitcoin Exchange Traded Funds (ETFs) saw $1.5 billion in outflows, contrasting with inflows into Ethereum ETFs, signifying a possible shift in capital.
Key Levels to Watch
As Bitcoin tries to stabilize, the $111,500–$113,000 range becomes crucial. This range doubles as psychological resistance and short-term holders’ cost basis. Reclaiming this zone could spark a relief rally targeting $116,000–$118,000. However, a failure to hold current levels might push Bitcoin toward $107,000, with stronger downside risks at $104,000 or even $97,000.
Interestingly, on-chain data indicates that large investors, or whales, are waiting for lower levels to accumulate Bitcoin. Thus, deeper corrections might invite eventual support.
Market Sentiment and Future Outlook
Despite the current bearish momentum, 90% of Bitcoin wallets remain in profit. However, traders remain cautious, especially with institutional outflows and weak derivatives activity. Macroeconomic factors, such as Federal Reserve policy updates, may further influence Bitcoin’s price action.
If Bitcoin manages to consolidate above $111,500–$113,000, bearish pressure might ease. However, sustained weakness below $111,000 could lead to sharper corrections with increased liquidation activity. The coming days will be crucial in determining Bitcoin’s direction.
Related Product Recommendation
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