Market Decline and Key Price Levels
The Bitcoin and cryptocurrency markets are experiencing a downturn, influenced by the prolonged government shutdown in the US and the hawkish stance of the Federal Reserve.
Bitcoin has fallen below the $95,000 level, marking a six-month low. There is a risk of Bitcoin dropping below $90,000 this week, as the FOMC minutes and data, which have been delayed due to the lockdown, are expected to be released.
Technical Analysis and Bearish Signals
Market analyst Omkar Godbole reported that Bitcoin has strengthened its bearish signals by falling below the 50-week simple moving average (SMA). This SMA has historically served as a long-term support level.
According to Godbole, net inflows into crypto ETFs have slowed for two consecutive weeks. Concurrently, selling pressure from long-term investors has increased, and liquidity from retail investors has yet to recover.
Godbole further noted that Bitcoin experienced a decline of nearly 10% in the seven days leading up to November 16. This period saw the formation of a large bearish candle, with the price closing below the 50-week SMA.
He described this decline as a "transition from a bullish pattern to a warning phase." The analyst suggested that investors might shift from a "buy on the dip" strategy to a "sell on the rise" strategy.
“The 50-week SMA has been a key support that has led several recoveries since the start of 2023, but following the recent breakout it is likely to become a selling zone in the short term.
The 50-week SMA is currently acting as resistance near $102,868. At this point, it is difficult to assess a return to an uptrend until a sustained weekly close above the 50-week line is confirmed.
Key technical levels need to be broken to the upside.”
Analyst Predictions and Market Sentiment
Derivatives firm Bitunix has also indicated potential downside for Bitcoin. They project that Bitcoin could drop to $89,600 if it breaks the short-term support levels between $93,000 and $95,000. Bitunix added that any recovery attempts would encounter resistance at $100,200, followed by $107,300.
Bearish expectations are also evident on the decentralized prediction market platform Polymarket. The platform estimates a 77% probability that Bitcoin will fall below $90,000 in November.
In contrast, analyst TraderT expressed a more optimistic outlook, stating that "the market bottom is near."