Bitcoin continues to surprise traders, with its price plunging by more than $6,000 in just 48 hours after being rejected at $65,000. This sharp decline triggered over $300 million in liquidations across the crypto market, primarily affecting long positions.
Market Sentiment Shifts Quickly
Just when it seemed safe to go long, with macro indicators generally pointing to a bullish trend, Bitcoin surprised the market with another sharp decline. The 9.6% drop in just two days caught many off guard. Contributing to this downturn was a sudden outflow of 2,000 Bitcoin from Spot Bitcoin ETFs on Tuesday, breaking an eight-day streak of continuous inflows.
Is a Bounce Imminent?
Breaking Key Support Levels
On the short-term chart, Bitcoin broke through its upward trend line on Tuesday, dropping swiftly to the critical horizontal support at $58,000. The key question now is whether this support level will trigger a bounce or if the price will continue to slide towards the 0.618 Fibonacci retracement level at $55,000.
Weekly Close Holds the Answer
Looking at the weekly time frame, the $58,000 level remains a crucial support, echoing its significance during the 2021/2022 bull market. A bounce from this level could indicate a potential recovery.
The short-term Stochastic RSI indicators are currently bottoming out, suggesting that upside momentum could soon return. However, there are mixed signals; while the weekly Stochastic RSI hints at a possible upward cross, the Relative Strength Index (RSI) shows signs of concern, as it appears to be rejected by the downtrend.
This Sunday’s weekly close will be critical in determining the next move. If Bitcoin successfully bounces from the $58,000 level, we might see a bullish signal, but a failure to hold this support could lead to further downside.
