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Bitcoin at a Crossroads: Will BTC Hit $90K or Slide Deeper?
The price of Bitcoin (BTC) has been in a precarious situation lately, leaving many investors questioning the future direction. While some believe that it’s poised to hit the coveted mark of $90,000, others are more cautious due to recent trends.
As of now, the data suggests that retail and institutional participation remain low, indicating fragile momentum in the market. This is particularly concerning as Bitcoin futures traders have started unwinding their positions at breakeven levels, potentially setting the stage for another pullback.
One of the primary concerns arises from the sharp drop in Bitcoin derivatives Open Interest (OI), which has plummeted to a five-month low. In under two weeks, approximately $14 billion worth of positions have been closed out. This de-risking effort is likely driven by traders’ efforts to mitigate volatility and avoid potential losses.
Additionally, we can see that supply-side liquidity absorption has increased significantly in the past few days. As BTC has bounced back 10% from its low point at $78,000, this might signal a temporary reprieve for investors. However, if we take into account the IntoTheBlock data indicating that a move to $86,729 would put 591.93K addresses holding 379.52K BTC in profit, it’s uncertain whether Bitcoin will continue its upward trajectory.
Despite the recent upswing, persistent fear and macro uncertainty continue to plague risk appetite. Under these circumstances, reclaiming $90,000 appears to be a daunting task for Bitcoin. The cryptocurrency must first absorb incoming liquidity before transitioning into resistance.
Retail participation has been surprisingly muted in recent times, with only 22K BTC worth of inflows observed at the current price level ($86,103). Furthermore, institutional capital remains sidelined, indicating that investors are still hesitant to re-enter the market.
According to AMBCrypto’s findings, subdued FOMO signals that it’s too early to confirm a strong holding pattern. Consequently, the possibility of a near-term breakout in question remains open for debate.
Another critical level is approaching: $86,669, which poses significant liquidation risk if breached. This barrier holds over $51 million in potential losses and may induce profit-taking from short-term holders (STHs). Furthermore, a considerable cohort of HODLers will enter the money zone near this mark, heightening the likelihood of price instability.
As traders weigh their options, it’s essential to recognize that weak spot demand and continued de-risking in derivatives markets leave Bitcoin vulnerable to another pullback.
Source: https://ambcrypto.com/bitcoin-at-a-crossroads-next-stop-90k-or-a-deeper-dip
