Bitcoin’s market is currently signaling caution as greed levels hit an extreme high. The Fear & Greed Index, now at 84, often suggests a potential price decline. Alongside this, on-chain data indicators such as the Sell-Side Risk Ratio and Net Taker Volume are raising concerns, pointing toward a possible market peak. How the market reacts next could rely heavily on key U.S. inflation reports, like the Consumer Price Index (CPI) and Producer Price Index (PPI), which are anticipated to be released this week. These reports may significantly influence Bitcoin’s imminent movements.
Amidst these developments, Bitcoin has experienced a minor decline of 0.4%, dipping to $99,439 in just a few hours. This movement has contributed to a wave of negative sentiment surrounding Bitcoin.
Bitcoin Entering “Death Zone”
Analyzing the current scenario, experts from 10X Research urge investors to remain vigilant. Their report emphasizes that Bitcoin is approaching what they term its “death zone.” This term, borrowed from mountaineering, refers to altitudes above 8,000 meters where survival becomes increasingly challenging due to the lack of oxygen. In parallel, Bitcoin’s price appears to be entering a critical phase, with market indicators suggesting that the “air” is getting thinner, indicating a potential slowdown.
Over the past two weeks, Bitcoin has been trading within a narrow range, forming a Doji candlestick pattern—an archetypal indicator of market indecision. This pattern is often a precursor to a consolidation phase. However, 10X Research highlights deeper signals that suggest the market might be on the brink of a correction. Declining trading volumes and diminishing buying interest at elevated levels raise red flags that Bitcoin may struggle to sustain its $100k position.
Technically, Correction on the Cards?
Diving deeper into on-chain metrics and the broader market structure reveals more alarming signals. As Bitcoin’s momentum wanes, investors are advised to exercise caution. On-chain data indicates an increasing risk of correction, particularly with the declining volume and the absence of significant buying interest at higher levels. Additionally, with market sentiment beginning to shift and key support levels under duress, Bitcoin may encounter a challenging path forward.
Despite the potential risks, the report does not claim that Bitcoin has reached its peak. Instead, it underscores the necessity of vigilant monitoring during this stage, where the market could either consolidate or face a downturn. The upcoming days will likely prove pivotal in determining whether Bitcoin can uphold its upward trajectory or if the “death zone” will prompt a more substantial correction.
Bitcoin Price Today
Supporting the bearish outlook, Bitcoin’s 1.74% intraday pullback resulted in a $62.89 billion reduction in the crypto market, bringing its total market capitalization to $3.55 trillion. A bearish reversal from a local resistance line indicates a potential 12% dip, with $87,680 identified as the next support level.
Liquidations have surged to $290 million, with $217 million in long positions being wiped out, signaling increased selling pressure. While some traders continue to adopt a bullish perspective, the emerging wedge pattern suggests further downside risks.
In summary, Bitcoin’s market is currently teetering on the edge, with several indicators warning of potential challenges ahead. Investors are advised to remain attentive and consider these signals carefully when planning their strategies in the volatile crypto landscape.
