Bitcoin's Downward Trajectory: A Technical Analysis

The cryptocurrency market has witnessed a significant shift in Bitcoin's price action. After reaching a peak near $124,533, the digital asset has entered a corrective phase, signaling a potential bearish trend. This analysis explores the current market structure, key support and resistance levels, and possible price targets for Bitcoin traders on Gate.

Market Structure Breakdown

The recent price action indicates a clear break of structure (BOS) at $112,879, where the price penetrated a previous swing low. This development suggests a transition from a bullish continuation to a potentially bearish phase. Notably, no evident change of character (CHoCH) back to the upside has materialized, implying that sellers maintain control of the market momentum.

Critical Support and Resistance Zones

A substantial demand zone has been identified between $92,000 and $99,000. Historically, this area has attracted aggressive buying interest, propelling Bitcoin to new heights. However, given the robust rejection above $120,000, this zone may face another test.

The midrange area around $111,000-$112,000, which previously acted as support, has been decisively breached by sellers, indicating market weakness. On the supply side, the $118,000-$120,000 region remains a formidable resistance, where prices experienced a sharp decline with minimal buyer intervention.

Current Price Action Analysis

Bitcoin is currently retesting the $111,000-$112,000 level, which recently gave way under selling pressure. The price action at this level shows rejection wicks and hesitation, suggesting that supply is effectively capping any upward movement. Market indicators point towards a potential move down to the $98,730 level, hinting at another downward leg into the larger demand zone.

Trading Outlook and Risk Management

The prevailing trade bias leans bearish. The anticipated price movement is downward, targeting the $98,700 level, with a possible extension into the $92,000-$94,000 demand zone if downward momentum intensifies.

Traders should note that a definitive daily close above $113,000 would invalidate this bearish scenario and potentially open the path for a retest of the $118,000-$120,000 resistance zone.

Market Momentum and Candlestick Analysis

Current market momentum favors sellers, with downward moves showing impulsive characteristics while rallies appear corrective. Recent candlestick formations display long upper wicks and smaller real bodies, consistent with supply absorption. The seller's dominance is expected to persist unless strong bullish candles break through the overhead resistance levels.

Traders on Gate should approach this market with caution, implementing proper risk management strategies. While the analysis suggests a bearish outlook, the cryptocurrency market's volatile nature demands constant vigilance and adaptability to changing market conditions.