Bitcoin (BTC) is presently trading below significant demand thresholds after dropping below the $90K level earlier this week. The price has reached new lows, and bullish sentiment has waned as the market experiences strong selling activity. BTC has fallen by 14% in less than three days, entering a phase of panic selling as investors respond to market instability.
This abrupt decline has fueled anxiety and speculation, with some analysts predicting a bear market while others maintain a positive perspective on BTC’s long-term potential. Despite this steep downturn, some cryptocurrency experts contend that panic selling at this juncture is a novice error.
CryptoQuant CEO Ki Young Ju highlighted essential metrics on X illustrating BTC’s price retracement post-price discovery, noting that such corrections are historically typical in bull markets. According to Ju, if you find yourself panic selling now, you might be inexperienced—suggesting that this is a common shakeout meant to eliminate weak holders before the next uptrend.
With Bitcoin’s price struggling below the $90K threshold, the upcoming days will be vital in determining if BTC stabilizes and rebounds or continues to decline toward deeper demand levels.
Bitcoin Enters a Correction Phase
Bitcoin is undergoing its largest correction of the year, grappling with prices below the $90K mark as fears and uncertainties among investors dominate the market landscape. This sudden drop has rattled confidence, with speculation regarding a possible bear market increasing as BTC tracks new lows.
In spite of the steep drop, leading analysts are observing significant confirmation levels. The market stands at a critical junction where BTC might either linger below $90K for a while or achieve a strong break above $95K to validate a recovery rally. The next few days are pivotal for establishing whether Bitcoin will stabilize or face additional downward pressure.
Ju’s insights about the correction suggest that a 30% pullback within a Bitcoin bull cycle is not uncommon. He reminds investors that in 2021, BTC experienced a 53% decline during its bull run yet still recovered to achieve a new all-time high. Ju cautions against emotionally driven trading behaviors, asserting that buying at market highs and selling at lows constitutes the poorest investment strategy.
Ju stresses the importance for investors to have a clear strategy instead of responding impulsively. Though the recent price movements appear alarming, historical patterns indicate that these types of corrections are part of a sustainable Bitcoin bull market.
BTC Testing New Demand Zone
Bitcoin is currently valued at $86,400, positioned just above the 200-day Exponential Moving Average (EMA) and about 5% away from the 200-day Moving Average (MA). These critical indicators act as long-term support levels, and maintaining above them is essential for bulls to avert further declines.
Should BTC manage to stabilize at these points, the subsequent significant step to regain bullish momentum would be surpassing the $90K threshold. Nonetheless, the market remains highly volatile, and this process may require time before the next major rally commences. Investors are vigilantly observing price movements to ascertain if Bitcoin can maintain a recovery phase or if another wave of selling pressure will force it into lower demand areas.
Historically, when Bitcoin interacts with the 200-day MA, it typically leads to a consolidation period before a substantial move occurs. If bulls succeed in reclaiming the $90K level and maintaining it as support, this would indicate the potential resumption of an uptrend. Conversely, failure to hold current positions could result in additional declines, with the $82K–$84K range becoming the next significant demand zone.
At this time, traders are waiting to determine whether Bitcoin can uphold its present levels or if a prolonged consolidation phase is necessary before a breakout can take place.
Featured image from Dall-E, chart from TradingView
