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bitcoin's recent price fluctuations have left investors in a state of uncertainty as the cryptocurrency has seen a dramatic drop from its high of nearly $107,000 to around $94,550. This volatility raises essential questions about bitcoin's ability to maintain its rally and whether it will be able to regain its footing in the coming weeks.
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Critical support levels under threat
CryptoQuantum <a target="_blank" href="https://cryptoquant.com/insights/quicktake/677e3f5fdf24d5265dd5601f-bitcoin-Funding-Rates-Highlight-Weak-Derivatives-Demand” target=”_blank” rel=”nofollow”>analyst Shayan has had something important to say about the current conditions of Bitcoins. According to him, the price is trying to stabilize just above the value of the $92,000 level, which he believes is a key support.
He notes that bitcoin is stabilizing near the $92,000 mark, which he identifies as a crucial support zone. If bitcoin falls below this level, it could trigger a wave of long liquidations and push prices towards the 100-day moving average of $81,000. Furthermore, this line has worked as a real dynamic support by attracting buying flows and can also cushion prices during a further decline.
Shayan highlights the role of market sentiment and technical indicators. Currently, bitcoin is fluctuating at significant support levels being created at the $90,000 level and the Fibonacci retracement levels at $87,000 and $82,000. If the levels mentioned above do not hold, there could be more selling pressure with corrections.
bitcoin Bullish Outlook Despite Bearish Fears
Amid this uncertainty, renowned cryptocurrency analyst crypto Rover has expressed a bullish outlook for bitcoin. He recently compared today's price action to historical patterns, suggesting that January could see positive trends for bitcoin.
<blockquote class="twitter-tweet”>
<a target="_blank" href="https://twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#bitcoin History repeats itself exactly.
January will turn green.
You will regret not having bought more here. pic.twitter.com/DCssLNMGh6
– crypto Rover (@rovercrc) <a target="_blank" href="https://twitter.com/rovercrc/status/1877042080171831734?ref_src=twsrc%5Etfw” rel=”nofollow”>January 8, 2025
In a tweet, he stated: “bitcoin history repeats itself exactly. January will turn green. You will regret not buying more here.” Their analysis indicates that if bitcoin can overcome the critical resistance level of $100,000, it could potentially surpass $107,000.
Large capital inflows
Rover's positivity is reinforced by huge capital inflows into <a target="_blank" href="https://finance.yahoo.com/news/bitcoin-etf-soared-2024-growth-220949315.html” target=”_blank” rel=”nofollow”>bitcoin ETFwhich attracted more than $900 million in inflows from institutions such as <a target="_blank" href="https://www.blackrock.com/us/financial-professionals/investments/products/bitcoin-investing” target=”_blank” rel=”nofollow”>black rock and Fidelity. The growing institutional interest also indicates confidence in bitcoin's long-term prospects. However, it also warns that failure to close above the $100,000 mark will lead to a pullback to $92,000 or even lower.
The broader cryptocurrency market is also feeling the pressure. This decline comes alongside bitcoin's failure to stay afloat and other cryptocurrencies like Ether and Solana They have fallen more than 7%.
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Even traditional crypto stocks such as MicroStrategy and Coinbase have fallen sharply. Falling funding rates within the derivatives market add another layer of bearish sentiment around bitcoin. According to Shayan, the decline in funding rates had reflected the decline in demand for derivatives, which also played a key role in maintaining price trends.
Featured image from Pixabay, TradingView chart
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