- Bitcoin’s Bearish Engulfing Weekly pattern signals potential short-term decline.
- $98,000 support remains critical as BTC faces rejection at $102,500 resistance.
- Liquidations and hawkish Fed speech intensify Bitcoin’s bearish momentum.
Bitcoin (BTC) is experiencing a pivotal moment in its price trajectory as it navigates a potential correction in its ongoing price discovery phase. As highlighted by Rekt Capital, an analyst, BTC is developing a Bearish Engulfing Weekly candlestick pattern, which, if confirmed, could signal a short-term bearish reversal.
As the cryptocurrency hits Week 7 in its price discovery cycle, history shows that this period often brings significant corrections. While the weekly close is still days away, the market’s behavior is worth monitoring, as it may reveal whether Bitcoin is poised for a dip or if it will hold key support levels.
Key Support and Resistance Levels Under Scrutiny
Bitcoin’s recent price action shows the coin struggling to maintain higher levels after hitting a peak of around $108,000. Trading near $101,280.20 at press time, the cryptocurrency has faced pressure, dropping by 2.10% in the last 24 hours.
The price chart also reflects a sharp intraday fluctuation, with a high near $105,000 and a low around $98,000. Despite attempts at recovery, Bitcoin has failed to break above the immediate resistance level at $102,500. If it continues to face rejection at this level, the coin could revisit the lower support zones.
Key support levels remain critical for BTC’s near-term outlook. The $98,000 level is seen as a strong support zone, with buyers previously entering at this price. Additionally, $100,000 acts as a psychological barrier, often attracting attention in the broader market. A break below these levels could signal further bearish pressure, bringing Bitcoin closer to retesting $98,000.
Market Dynamics and Liquidation Impact
The market has been highly volatile, with external factors such as Federal Reserve Chairman Jerome Powell’s hawkish speech driving some of the recent sell-offs. According to sources, the speech contributed to Bitcoin falling below the $100,000 mark, dropping 5% in just 24 hours.
A notable liquidation event followed, with $709 million liquidated across the market, most of which came from long positions. This liquidation could exacerbate the downward pressure, leading to further losses if the bearish sentiment persists.
Technical Indicators Suggest Caution
Analyzing technical indicators reveals a mixed outlook for Bitcoin. The 1-day Relative Strength Index (RSI) sits at 56.40, indicating a neutral market sentiment. However, the 1-day MACD, trading below its signal line, points to a potential short-term bearish trend.
