The Bitcoin market is going through a decisive moment in its current price structure. According to analyst Daan Crypto Trades, it is vital that bulls forcefully defend the key Fibonacci support to avoid a severe bearish reversal. Likewise, this expert warns that losing the 0.382 retracement zone could trigger a drop towards the April lows, located near 76,000 dollars.
Over the weekend, volatility shook leveraged positions in the market. Bitcoin experienced a rapid decline below 88,000 dollars, driven by a leverage washout, before rebounding sharply towards 91,500 dollars. For his part, the analyst known as “Bull Theory” described this move as typical weekend manipulation designed to flush out both long and short positions.
In terms of concrete figures, the volatility was devastating for reckless traders. Within a four-hour span, the asset dropped from 89,700 to 87,700 dollars, liquidating over 171 million in long positions. Subsequently, the price rallied 3,500 dollars to the upside, wiping out another 75 million in short positions, making clear the latent risk in the current environment.
Will the market withstand the pressure ahead of upcoming Federal Reserve decisions?
The relevance of maintaining this technical level goes beyond a simple number. This threshold represents practically the last major support before testing the spring lows again, which would break the high time frame market structure. Furthermore, traders remain cautious ahead of the Federal Open Market Committee meeting, where a 0.25% rate cut is widely expected, which could define short-term liquidity.
On the other hand, the macroeconomic situation adds layers of complexity to the scenario. Markus Thielen of 10x Research noted that ETF inflows are softening and trading volumes are thinning into December, limiting upside participation. Thus, although some point to the end of quantitative tightening as a tailwind, Thielen warns that these factors are irrelevant if the market structure fails to support a convincing move.
To conclude, not the entire outlook is gloomy for the cryptocurrencies sector. Bitfinex recently reported that the market is showing signs of “seller exhaustion” following massive deleveraging. Additionally, the “liveliness” indicator is rising, suggesting that underlying demand is renewing and that long-term holders could be re-entering, paving the way for a potential stabilization and rebound phase.
