Bitcoin (BTC), the leading cryptocurrency by market capitalization, is currently displaying bearish tendencies, suggesting a potential significant price drop in the near future. This negative outlook is primarily influenced by the overall market sentiment and the recent breach of a crucial support level at $66,500.
Bitcoin Technical Analysis and Upcoming Levels
The technical analysis provided by CoinPedia indicates a bearish scenario for BTC as it struggles to maintain its position above the $66,500 threshold. Moreover, a bearish engulfing candlestick pattern has emerged on the daily chart, situated at the upper boundary of a descending channel pattern. This boundary has historically been a point of significant selling pressure for the asset. Since March 2024, Bitcoin has tested this level on more than six occasions, each time followed by a price drop exceeding 20%. The current chart pattern echoes these previous instances.
Based on historical momentum and price action, should BTC close its daily candle below the $66,400 level, there is a strong likelihood of a 10% decline, potentially reaching the $60,000 mark in the coming days. This scenario hinges on the asset’s ability to withstand additional selling pressure from traders and investors.
Bearish On-Chain Metrics
Further compounding Bitcoin’s bearish outlook are on-chain metrics. Analysis from the on-chain analytics firm Coinglass highlights a BTC Long/Short ratio of 0.93, reflecting a prevailing bearish sentiment among traders. Additionally, open interest has decreased by 4.2% in the past 24 hours, signaling the liquidation of long positions following the recent breach of the support level.
Major Liquidation Levels
Currently, the key liquidation levels are identified at $65,710 on the downside and $68,150 on the upside, as per Coinglass data. Traders are heavily leveraged at these levels. Should market sentiment persist and the price drop to $65,710, approximately $558.2 million in long positions are at risk of liquidation. Conversely, if the sentiment improves and the price climbs to $68,150, around $1.31 billion in short positions could face liquidation.
Current Price Momentum
As of the latest data, Bitcoin is trading near $66,390, experiencing a minor decline of 1.1% over the past 24 hours. During this timeframe, trading volume has decreased by 26%, indicating a reduction in participation from traders and investors compared to previous days. This decrease in volume may suggest hesitation among market participants amid the current bearish outlook.
In conclusion, Bitcoin’s current market conditions reflect a bearish trend fueled by technical factors and on-chain metrics. The asset’s ability to navigate this challenging phase will depend on market sentiment and price action in response to critical support and resistance levels.
