Bitcoin Tests Critical Support Amidst Heavy Liquidations, Facing Potential Further Decline or Recovery
Bitcoin Tests Critical Support Amidst Heavy Liquidations, Facing Potential Further Decline or Recovery
Bitcoin has recently fallen to a five-month low, triggering significant long liquidations totaling $640 million and testing a crucial support line around $101,000. Analysts are closely watching this level, as a sustained break below it could lead to deeper losses, potentially towards a CME gap between $92,000 and $93,000. However, strong buying interest has been observed near the $98,000 mark, indicating potential for a recovery if the current support holds. The market remains at a 'breaking point', with the outcome dependent on whether bulls can defend key trendlines.
Bitcoin Near Breaking Point As It Tests Crucial Support
Bitcoin experienced a significant pullback, reaching a five-month low before a modest recovery. The digital asset is currently testing a crucial support line, which market analysts suggest could determine the short-term direction of the broader bull market. According to on-chain data, Bitcoin touched an intraday low of $98,900, but buyers swiftly pushed the price back above $101,000 and subsequently to $103,400.
This recent price action saw Bitcoin losing the $107,000 support level, a price point it had maintained for approximately 130 days within a range of $107,000 to $123,000. The breach of this support initiated heavy liquidations in the futures market, wiping out around $640 million in long positions over a 24-hour period. This event marks the second-largest daily long liquidation since June 2021, underscoring the market's current volatility.
The $101,000 level has emerged as particularly significant, representing the lower trendline of a long-term ascending channel that has been in place since October 2023. Traders are closely monitoring this level: defending it would be seen as a bullish indicator, signaling a potential bounce. Conversely, a decisive close below this trendline could herald deeper losses and a breakdown in the market structure that has underpinned the recent rally.
Adding to the bearish outlook, a nearby gap on the CME futures chart exists between $92,000 and $93,000. Historically, Bitcoin often tends to 'fill' such gaps, making this area a potential target if bearish pressure continues. However, strong buying interest around the $101,000 zone has been observed, indicating demand that could potentially halt any further slide and drive prices back up. The durability of this demand will be crucial, with volume and near-term momentum being key determinants.
XRP Mentioned in Positive Context
In related market commentary, a finance expert suggested that XRP's current low price is not a problem but rather a 'blessing', indicating a positive long-term outlook for the asset despite its recent performance.