Bitcoin (BTC) has experienced a significant drop, falling below the crucial $100,000 mark and triggering industry-wide liquidations worth over $2 billion.
As of Thursday morning, BTC/USD was trading at $97,300, marking an 11% decrease from its all-time high of $109,026.
This decline is attributed to institutional movements and analytical indicators suggesting potential further correction.
Despite this downturn for Bitcoin, the TRUMP coin saw a 10% increase in the last 24 hours, bringing its market cap close to $4 billion.
However, TRUMP has lost its third-place ranking among the largest meme coins to PEPE.
TRUMP’s Relative Strength Index (RSI) has risen to 48.5, up from 27.8 just two days ago and from a low of 19.8 four days ago. This rapid recovery indicates a return of buying pressure after TRUMP was in deeply oversold conditions.
Price action
An RSI below 30 suggests an asset is oversold and could be due for a rebound, which aligns with the recent price action. Now at 48.5, TRUMP’s RSI is at its highest level in weeks, indicating a shift towards a more neutral stance, though it has not yet entered bullish territory.
RSI is a momentum indicator that measures the speed and magnitude of price movements on a scale from 0 to 100. Readings above 70 suggest overbought conditions and a potential pullback, while readings below 30 indicate oversold conditions and a possible recovery.
With TRUMP’s RSI nearing 50, it signals a balance between buying and selling pressure, and if it continues to rise and crosses 50, it could indicate growing bullish momentum.
Concerns over potential selling pressure have emerged due to the on-chain movement of 49,700 BTC from the 6-12 month spent output age band (SOAB). XBTManager suggests these moves usually precede market turbulence and may impact prices in the coming days.
However, recent data shows that whale addresses have accumulated over 30,000 BTC during the current dip, potentially offering price support.
According to Alphractal’s study, market sentiment has turned negative for the first time since November 2024. For contrarian investors looking to counter the herd mentality, this shift in sentiment could present attractive buying opportunities.
What you should know
- Bitcoin’s current market structure, characterized by a symmetric triangular pattern on shorter timeframes, reflects the consolidation phase observed in March 2024.
- Technical analysis indicates possible support levels ranging from $94,101 to $92,600, with a fair value gap at $99,500 that might be reached in the near term.
- The potential creation of a US Bitcoin Strategic Reserve has also drawn attention from the market. Recent comments by Trump administration crypto czar David Sacks revealed that the current policy is to evaluate the feasibility of such a reserve, lowering prediction market odds to 47% for deployment in 2025.
Despite short-term technical signals pointing to further pressure and possible challenges at lower support levels, the story of institutional adoption remains strong.
The current 11% decline from all-time highs fits well within historical norms for bull markets, suggesting a healthy consolidation rather than the start of a significant correction.
A drop to the $90,000 level would provide significant psychological and technical support, still much higher than historical drawdowns.
Market participants should monitor ongoing institutional flows and whale accumulation patterns as potential drivers of price recovery.