The recent market sentiment has taken a nosedive, dropping to 20 for the first time in recent memory, signaling fear among investors. This fear was reflected in the ETF market, which saw a significant outflow of over $1 billion. Blackrock, in particular, recorded a massive outflow of over $418 million or 4,200 BTC, the largest single outflow seen. As a result, the price of Bitcoin plummeted close to $82,000, attracting significant buying interest. The bulls have since triggered a strong rebound, pushing the price above $86,000. However, the question remains whether this current flip is sustainable or if it’s just a bull trap in the making.
The steep three-day drop in BTC price, wiping out over $300 billion from the market, has left many wondering about the future of Bitcoin. Despite the sharp decline, some remain bullish on the cryptocurrency, suggesting that a revival of the bull run could be on the horizon once the price enters the demand zone. However, from a broader perspective, Bitcoin is still under the influence of bears, and the current rebound may only offer short-term relief.
One key indicator that is raising concerns is the Weekly RSI (Relative Strength Index). The RSI helps identify buy and sell points and the potential for horizontal consolidation. In recent times, the RSI has remained bearish while the price has continued to fluctuate. A similar pattern was observed back in 2021, leading to a significant drop in the BTC price. If history repeats itself, failing to secure levels above $100K could result in a 50% drop in price.
Looking ahead, more bearish action may be on the horizon for the BTC price. The realized price and profit/loss margin indicate that the cryptocurrency is likely to face further selling pressure. An analysis by popular analyst ALI shows that buying opportunities have historically occurred when the realized loss margin hits certain levels. The current margin suggests that the rally may be approaching a potential buying zone, although market psychology and investor behavior raise concerns.
In terms of future price action, analysts are divided. While some believe that the current rebound could mark the end of the bearish trend, liquidation levels indicate a mixed outlook. Over-leveraged clusters on both sides suggest that Bitcoin may experience significant volatility in the coming days. Therefore, investors should be prepared for more downside in the short term, with the potential for a bullish start to the new month leading to elevated prices until the end of the quarter.