Bitcoin has sharply declined, breaking below a critical support level and raising concerns among traders and investors about further downside momentum. In just 1.5 hours, BTC plunged 24%, currently trading under $106,000. With growing bearish pressure, the leading cryptocurrency by market cap could be heading toward the psychologically significant $100,000 mark if selling intensifies.
As of this writing, Bitcoin’s price sits at approximately $105,503—down from recent highs—and continues to face resistance from aggressive sellers. On Tuesday, BTC dipped to around $105,250, failing to hold the crucial support zone of $105,800. This breakdown signals weakening bullish momentum and opens the door for additional losses in the near term.
With bears now in control, market analysts are closely watching key technical indicators to assess whether this is a short-term correction or the start of a deeper pullback.
Bitcoin Price Analysis: Bearish Momentum Builds on 4-Hour Chart
The 4-hour chart for BTC/USD paints a clear bearish picture, though inefficiency in the downward move suggests potential for short-term volatility. Despite the drop, the decline lacks strong momentum—indicating that sellers may first trigger upward liquidity before resuming their downward push.
Technical indicators reinforce this cautious bearish outlook:
- The Moving Average Convergence Divergence (MACD) has dipped into negative territory, signaling increased selling pressure and a shift in favor of bears.
- The Relative Strength Index (RSI) stands at 46, which is neutral but leaning toward weak buying interest. It hasn’t yet entered oversold territory, suggesting more room for downside movement before a potential rebound.
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If Bitcoin remains below key moving averages—particularly the 50-period and 200-period EMAs—the path toward lower support levels becomes more likely. The next major support sits at $104,500**. A decisive break below that level could pave the way for a test of **$100,000, a round number that often acts as both psychological support and a magnet during strong sell-offs.
Historically, such milestones tend to draw significant trading volume, making them pivotal turning points. Should BTC reach $100K, it would mark its first revisit to that level since June 23—highlighting a dramatic reversal from earlier optimism fueled by ETF inflows and institutional adoption.
What Could Reverse the Downtrend?
While the short-term outlook appears bearish, a recovery above key resistance zones could invalidate the current sell-off structure.
A sustained move above the Effective Price Action (EPA) level of $106,719 would suggest renewed buyer interest and potentially halt further declines. Such a breakout might trigger short-covering rallies, pushing prices higher in the coming sessions.
Even more bullish would be a surge past the Induced Liquidity Zone (ILQ) at $107,866**. Clearing this threshold could reactivate upward momentum and propel Bitcoin back toward **$109,000, especially if accompanied by positive macroeconomic news or strong on-chain activity.
Market sentiment remains fragile, however. Any resurgence in fear—driven by regulatory headlines, exchange outflows, or broader financial market instability—could accelerate selling pressure.
Key Support and Resistance Levels to Watch
Understanding critical price levels helps traders anticipate potential reversals or breakdowns. Here are the most important zones for Bitcoin in the current cycle:
- Immediate Resistance: $106,719 (EPA level)
- Strong Resistance: $107,866 (ILQ zone), then $109,000
- Immediate Support: $104,500
- Major Psychological Support: $100,000
A close above $107K could signal institutional re-entry and spark a relief rally. Conversely, failure to defend $104,500 increases the probability of a deeper correction.
Volume analysis also plays a role. Low-volume bounces may indicate weak demand, while high-volume breaks below support suggest strong conviction among sellers.
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Market Context: Why Is BTC Selling Off Now?
Several factors may be contributing to the sudden drop:
- Profit-Taking After Rally: Bitcoin had gained momentum in previous weeks due to positive ETF developments and stable macro conditions. Traders may be locking in profits after rapid gains.
- Leverage Liquidations: Sharp drops often trigger cascading liquidations in leveraged positions, amplifying downward moves.
- Macro Uncertainty: Despite strong U.S. economic data, lingering concerns about inflation and Fed policy remain. Risk assets like crypto can be sensitive to shifts in interest rate expectations.
- On-Chain Metrics: Recent data shows increased outflows from wallets to exchanges—a potential sign of impending sell pressure.
These elements combine to create an environment where sentiment can shift quickly, especially when technical support fails.
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Frequently Asked Questions (FAQ)
Q: Why did Bitcoin suddenly drop 24% in 1.5 hours?
A: The sharp decline was likely triggered by a combination of failed support at $105,800, leveraged position liquidations, and profit-taking after recent gains. High volatility is common in crypto markets during key technical breakdowns.
Q: Is it normal for Bitcoin to fall below $106,000?
A: Yes. While $106K is a psychological level, Bitcoin frequently experiences corrections after rallies. What matters most is whether it can reclaim key resistance levels or if selling pressure continues.
Q: Could Bitcoin really hit $100,000 again?
A: Absolutely. If bearish momentum persists and BTC breaks below $104,500, a retest of $100K becomes increasingly likely. However, strong buying at that level could trigger a reversal.
Q: What should traders watch for in the next 24–48 hours?
A: Focus on price action around $106,719 (EPA) and volume trends. A breakout above this zone could signal recovery. Also monitor on-chain flows and derivatives data for signs of panic or accumulation.
Q: Are dips like this buying opportunities?
A: Many long-term investors view pullbacks as entry points, especially near major psychological supports like $100K. However, timing the bottom is risky—dollar-cost averaging may be safer for new investors.
Q: How does RSI impact Bitcoin’s price direction?
A: With RSI at 46, Bitcoin isn’t oversold yet. Typically, readings below 30 suggest exhaustion among sellers. Until then, further downside remains possible even if price stabilizes temporarily.
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Final Thoughts
Bitcoin’s recent breakdown below $105,800 marks a shift in short-term dynamics. While a move to $100,000 isn’t guaranteed, it’s now within the realm of possibility given current bearish momentum and weak buying pressure.
Traders should remain vigilant, using technical levels and volume patterns to guide decisions. For long-term holders, such pullbacks aren’t uncommon—even in strong bull markets.
Staying informed through reliable analytics platforms can make all the difference between panic-driven exits and strategic positioning.
Regardless of where BTC goes next—whether rebounding toward $109K or testing $100K—the ability to interpret signals calmly will define success in today’s fast-moving digital asset landscape.