Bitcoin’s price has swiftly recovered above $100,000 after a flash crash cast a wick down to $90,500 on Dec. 5.
The Bitcoin (BTC) market has experienced significant volatility in recent days, with prices plunging and subsequently rebounding from critical support levels. As of the latest updates, Bitcoin has reclaimed key resistance levels above its all-time high, signaling a potential bullish divergence in the near-term trading horizon.
Bitcoin 4-hour chart
The Bitcoin 4-hour chart reveals a sharp decline from its recent peak at $104,600 to a low of $90,500. This price action indicates a steep correction, with Bitcoin consolidating below its previous high within a single trading day.
Despite the 14% plunge…
Bitcoin’s sharp decline on Dec. 5th was preceded by a sell-off across global markets, with institutional investors and retail traders alike exiting long positions in large quantities. The 14% price drop from Bitcoin’s all-time high has been met with mixed reactions among market participants.
Bitcoin funding rate resets after $400 million liquidation
The sharp decline in Bitcoin’s price was preceded by a massive sell-off across the futures and spot markets, with over $400 million wiped off the exchange-traded funds (ETFs) tracking Bitcoin. This outflow has raised concerns about liquidity in the market.
Moreover, Bitcoin’s funding rate has reset to its previous level following the price decline, signaling a potential normalization of trading activity in the coming days. This development has been interpreted as a key indicator of market sentiment and could have far-reaching implications for the broader cryptocurrency ecosystem.
However…
While the selling pressure appears to have abated, the broader market remains under significant bearish pressure. The collapse of major cryptocurrencies such as TerraUSD (UST) and Celsius Network has weighed on investor confidence, creating an environment conducive to further declines in Bitcoin’s price.
Bitcoin futures metric analysis
The Bitcoin futures market has exhibited notable volatility, with aggregated open interest declining by approximately 10% over the past week. This reduction in open interest indicates a potential normalization of positions, signaling that traders may be preparing for a rebound in Bitcoin’s price.
Additionally, the aggregate spot premium has widened slightly, reflecting increased demand for spot contracts relative to futures instruments. This development suggests that market participants are increasingly uncertain about the short-term trajectory of Bitcoin’s price.
This is normal for Bitcoin…
The sharp decline and subsequent rebound from critical support levels have become a recurring theme in Bitcoin’s recent trading activity. As seen in previous cycles, Bitcoin has often retraced a significant portion of its losses before breaking out higher or consolidating within a defined range.
Bitcoin 1-day analysis
The Bitcoin 1-day chart reveals a bearish candlestick pattern with increasing volume on the downtrend line. This formation suggests that Bitcoin is facing resistance at this level, and any further decline would require sustained selling pressure to overcome it.
Based on Fibonacci extensions…
Technical analysts often use tools like Fibonacci retracement levels to predict potential price targets based on historical trading ranges. Applying these tools to Bitcoin’s recent price action indicates that the next key support level is at $95,000, while resistance lies near $102,000.
In conclusion, Bitcoin’s recent volatility reflects a complex interplay of factors ranging from macroeconomic developments to market sentiment and liquidity dynamics. While short-term bearish sentiment remains prevalent, the broader market appears poised for a rebound on the back of reduced selling pressure and increased confidence among investors.
