Bitcoin's struggle to maintain a price above $97,000 can be attributed to several factors:
1. Market Sentiment and Technical Analysis : Recent market analyses suggest that Bitcoin has been facing resistance around the $97,000 to $99,000 level, leading to a potential head-and-shoulders pattern on the daily chart, which is often indicative of a bearish reversal. Analysts have warned that failure to hold the $94,000 level could push Bitcoin's price down to around $79,000. This indicates that market sentiment might be turning bearish, particularly after a sharp decline from a peak over $100,000.
2. Profit-Taking and Liquidity : There has been significant profit-taking among Bitcoin holders, especially long-term holders, which was noted around the time Bitcoin hit its all-time high of $99,800. The realized profit on that day was substantial, at $443 million, suggesting that many investors decided to cash out their gains at or near this price point, thus increasing selling pressure. 0 reply
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Additionally, there's been mention of "spoofing" in the order books,. where traders place large orders to manipulate the price, potentially contributing to the difficulty in maintaining high price levels.
3. Macro-Economic Factors : The broader economic environment, including expectations around Federal Reserve policy, interest rates, and global economic uncertainty, plays a critical role. For instance, in past scenarios, rate hikes or hawkish statements from the Fed have led to sell-offs in risk assets like Bitcoin.
The recent drop below $100,000 following hints at a hawkish stance from the Fed could be one such example. 0 reply
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