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Bitcoin price is under pressure due to major outflows from Bitcoin ETFs and increased selling in crypto trading.
Key support zones at $100K, $98K, and $94.2K will decide Bitcoin’s next move in the ongoing market correction.
The Federal Reserve’s uncertain rate outlook is adding further stress to Bitcoin, ETFs, and overall crypto market sentiment.
Bitcoin recently experienced a sharp drop and is currently trading at a price close to $103,000 and $104,000. This decline occurred when the price briefly went below $100,000, causing uncertainty in the market. The sell-off came after investors started withdrawing money from Bitcoin exchange-traded funds (ETFs), and many traders were forced to close their positions due to heavy losses. At the same time, unpredictability around the United States interest rate cuts added more pressure to the market.
The primary reason for the decline is the substantial amount of money flowing out of Bitcoin ETFs. In just one day, investors withdrew around $578 million, and over the past five days, the total withdrawals totaled approximately $1.9 billion.
Another reason for the steep decline is the high number of liquidations. Approximately $1.3 billion worth of crypto trading positions were automatically closed when Bitcoin dropped below $104,000. This happens when traders borrow money to buy Bitcoin, and the price falls dramatically.
The situation became worse when the US Federal Reserve suggested that an interest rate cut in December is not guaranteed. Higher interest rates prompt investors to steer clear of riskier assets, such as cryptocurrency.
Bitcoin has dipped below its 200-day moving average of $109,800, which is an important long-term support level. When Bitcoin stays below this level, it often signals a longer correction.
The next strong support is expected around $98,000 to $100,000. This level was tested earlier in the summer. If Bitcoin falls below $98,000, the price could drop further to around $94,200. This level is seen on longer-term charts as the next area where buyers might step in.
If selling continues, a wider support zone will be established between $90,000 and $96,000. This is where several technical indicators, previous price levels, and trading volume point to possible support.
Some analysts also point to the 200-week moving average. This long-term average is currently around the mid-$50,000 range. Bitcoin has touched this line during major market crashes in past years. However, reaching this level would require a large-scale sell-off, which is not currently expected.
Also Read - What’s Next for Bitcoin After a Red October?
Bitcoin’s price is closely linked to the money flowing to and from Bitcoin ETFs. Recently, most ETFs have been experiencing net outflows, indicating that more people are selling than buying. As long as this continues, it will be difficult for the price to recover.
In the futures market, leverage has been reduced. Many traders who borrowed money to buy Bitcoin were forced to sell. This clears excessive risk from the market. Although this causes sharp drops in price, it also means the market might be healthier in the long term because fewer weak positions remain.
The larger financial environment also affects Bitcoin. Investors were expecting the Federal Reserve to cut interest rates in December. However, recent comments from the Fed suggest that a rate cut is not certain. When interest rates stay high, investors tend to avoid risky assets like Bitcoin.
If future economic data show lower inflation or slower economic growth, expectations for a rate cut might return. This could help Bitcoin stabilize or move higher again.
Market sentiment has turned negative. The Crypto Fear and Greed Index, which measures the overall sentiment in the cryptocurrency market, has shifted into the “fear” zone, with values near 20. At the same time, the total value of all cryptocurrencies has dropped to around $3.4 to $3.5 trillion.
This does not mean the market has bottomed out, but it does show that many investors are worried. In the past, very low sentiment sometimes created chances for long-term buyers, but only after the price stabilized.
In the near term, Bitcoin may continue to move sideways or decline unless ETF outflows cease and buying activity resumes. A fall to approximately $98,000 and $100,000 appears likely to be tested again. If this level does not hold, the price could drop towards $94,200.
If selling becomes heavier and Bitcoin stays under $98,000, the next possible range is between $90,000 and $96,000. This would be a deeper correction, but still within normal market movement.
However, if Bitcoin rises back above $105,000 to $106,000 and then shifts above the 200-day moving average near $109,800, the downtrend could be over. In that case, the price might aim again for resistance areas around $113,000 to $118,000.
Also Read - What If Bitcoin Reaches $1 Million? Full Impact Breakdown
Watching daily ETF inflows and outflows is important because they show the interest of large investors. Interest rate expectations in the United States should also be followed, as any softer tone from the Federal Reserve could support a price rebound.
Tracking whether Bitcoin can move back above major technical levels, such as $105,000 and the 200-day moving average, will provide a signal about whether the market is recovering or still weak.
Bitcoin is currently facing selling pressure due to ETF outflows, high liquidations, and uncertainty in the US interest rate policy. Important price levels to watch are $100,000, $98,000, and $94,200. If these levels break, the price could fall toward the low $90,000s.
The long-term trend is not completely hampered, but the market needs fresh buying and positive sentiment for a recovery. Until then, the market is likely to stay cautious, with the possibility of further drops before stability returns.
1. Why is Bitcoin dropping in price?
Bitcoin is experiencing a decline due to significant outflows from Bitcoin ETFs, substantial liquidations in cryptocurrency trading, and uncertainty surrounding the Federal Reserve's interest rate decisions.
2. What are Bitcoin ETFs and why do they matter?
Bitcoin ETFs allow investors to gain exposure to Bitcoin without directly owning it. When investors withdraw money from these ETFs, it puts pressure on Bitcoin’s price.
3. What key price levels are important for Bitcoin right now?
The most important support levels are near $100,000, $98,000, and $94,200. If these levels break, Bitcoin may drop further toward the low $90,000 range.
4. How is the Federal Reserve affecting the crypto market?
The Federal Reserve’s uncertain position on interest rate cuts is making investors cautious, reducing demand for risky assets like Bitcoin and other cryptocurrencies.
5. Could Bitcoin recover soon?
Bitcoin could recover if ETF inflows return, the price moves back above $105,000, and the 200-day moving average, currently around $109,800, is breached. Additionally, a softer policy outlook from the Federal Reserve could also contribute to its recovery.
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