Bitcoin Price Collapses to $96,000: How Far Will Bitcoin Fall Before It Hits the Bottom?

Bitcoin price movements in the last 24 hours have sent the entire cryptocurrency market into overdrive To another state of chaos and eliminations. In particular, Bitcoin has seen a price collapse of around 5% over the past 24 hours, which Breaking below the psychological price of $100,000 Threshold again. Although Bitcoin finally appears to be finding support at around $96,000, the leading cryptocurrency has fallen by about 10% in the past three days.

Interestingly, he is a technical analyst on the TradingView platform Suggested that Bitcoin decline This is due to the broader trend in investment markets, while also indicating a potential bottom for the price during the current decline.

Bitcoin price drops between support areas in Fibonacci retracement levels

Current price action of Bitcoin closely aligned with the Fibonacci retracement levels It is often used by traders to identify support and resistance. According to TradingView analysis, Bitcoin price is now within a retracement zone in the 4-hour time frame between the 0.618 and 0.786 retracement levels from its all-time high of 108,135 which it achieved just three days ago.

Historically, this range has served as a strong support area where Bitcoin has shown a tendency to bounce back. The analyst highlights that Bitcoin’s love of a bounce at the 0.786 level suggests that the cryptocurrency may find a temporary bottom near this range, which is located just below the $95,000 price level.

As mentioned earlier, Bitcoin price found support at $96,000, but Fibonacci retracements indicate that it may continue the downtrend. The analyst noted that it may fall to around $93,800 as an overshoot. However, any smaller move could lead to a more significant collapse risk.

Correlation with stock index sell-offs

One of the main factors affecting Bitcoin’s recent decline is the heavy sell-off in major US stock indices. Although the nature of the cryptocurrency industry is at odds with that of the traditional finance world, the emergence of Spot Bitcoin ETFs has created a close relationship between the two. This has led to Bitcoin becoming more sensitive to movements and sentiment in traditional markets.

As the analyst noted, S&P 500 futures, Nasdaq futures, and Dow Jones futures have all recently seen a significant pullback from the 1.618 Fibonacci reversal extension levels on the weekly candlestick time frame. This connection is further underscored by data showing significant outflows from Spot Bitcoin ETFs in the US. According to data from SosoValue, these ETFs saw outflows of $680 million on December 19, breaking a trend of 15 straight days of inflows.

At the time of writing, Bitcoin price is trading at $97,950, hovering above the critical support level of $96,000. However, since stock indices are still under downward pressure, there is a risk that Bitcoin price will continue to track these declines and perhaps even reach the $93,800 level before then. Regaining another upward momentum.

Featured image created with Dall.E, chart from Tradingview.com