Key Points
- Bitcoin’s price has experienced a significant drop, potentially leading to a deeper correction towards $92k.
- The bearish sentiment in the U.S. equities market, influenced by China’s DeepSeek LLM model, has impacted Bitcoin and the crypto market.
Bitcoin’s price has recently seen a sharp decline, which some analysts suggest could lead to a deeper correction towards the $92k mark.
Over the past 24 hours, Bitcoin has lost 5.88% of its value. It had reached a high of $109,588 on January 20th, according to Binance trading data, but has been on a downward trend since then.
Market Influences
The rapid losses are not necessarily indicative of inherent weakness in Bitcoin.
The U.S. stock market has been affected by the emergence of China’s DeepSeek LLM model, leading to a 2.9% drop in Nasdaq 100 futures. This has reportedly led to a $1 trillion loss in the U.S. equity market.
This negative sentiment has also impacted the cryptocurrency market, including Bitcoin. The market may also be de-risking in anticipation of the FOMC meeting later this week.
Bitcoin Price Prediction and Market Behaviour
For the past two months, Bitcoin has been trading within a range of $92k to $106k, with the mid-range level of $99k acting as a crucial support/resistance level.
The recent selling pressure has brought Bitcoin to this mid-range support level. The trading volume has remained relatively low, but this could change with the opening of the New York trading session.
If Bitcoin’s price drops below the mid-range level, a deeper price correction to $92k could be expected.
The MACD on the daily chart has formed a bearish crossover, indicating that the bulls are losing strength. However, the A/D indicator made higher lows, suggesting that the selling pressure is a reaction to the U.S. stock market expectations rather than inherent weakness in Bitcoin.
Data from Coinalyze shows that bearish sentiment has been strong in recent hours. The funding rate fell into negative territory during the quick price drop, while Open Interest saw an uptick as prices fell below $102k.
This suggests increased short-selling and bearish sentiment in the derivatives market. Crypto analyst Axel Adler noted that panic selling is not underway, as seen on the short-term holder profit loss to exchanges.
Please note that the information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
