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Bitcoin’s market struggles deepen as bearish momentum mounts, signaling a potential downturn exacerbated by negative metrics and trader sentiment.
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Investor sentiment is faltering, with Bitcoin facing critical resistance levels that heighten the risks of a significant correction.
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According to COINOTAG analysts, “The current market conditions mirror previous bear cycles, cautioning traders to prepare for potential downward adjustments.”
As Bitcoin’s market dynamics shift towards bearish territory, understanding the implications of these trends is crucial for investors navigating potential price declines.
Is Bitcoin entering a bearish phase?
The recent fluctuations in Bitcoin’s price and market metrics suggest a **bearish phase** may be emerging. The Inter-Exchange Flow Pulse (IFP), which assesses **net Bitcoin transfers** between spot and margin trading platforms, is now clearly negative. This trend is a strong indicator that **traders are closing their positions** and reducing their exposure, which could signify upcoming downward pressure on the price.
Historically, a negative IFP has signaled the onset of significant market corrections. For instance, in early 2018, the IFP transitioned to negative, closely following Bitcoin’s decrease from its all-time high, marking the beginning of an extended deep bear market. Similarly, the IFP turned negative in mid-2021, foreshadowing a steep decline as traders opted to deleverage and exit their positions.
Source: CryptoQuant
As the IFP has turned negative once again, **concerns are mounting** that Bitcoin’s price may revisit the **bearish trends** seen in previous cycles. The degree to which this shift affects market dynamics can vary — some instances only lead to brief corrections, while others can signify more prolonged downturns.
Weak momentum signals further downside
Currently, Bitcoin is trading around **$97,605**, struggling to gather momentum amid a bearish outlook. The **50-day simple moving average (SMA)** has emerged as immediate resistance at **$98,815**, while a more pivotal support level lurks at **$80,002**, represented by the **200-day SMA**.
Source: TradingView
The Relative Strength Index (RSI) currently rests at **46.88**, indicating weak buying interest as it remains below the pivotal neutral level of 50. Simultaneously, the Moving Average Convergence Divergence (**MACD**) stays within negative territory, suggesting sustained bearish momentum.
If Bitcoin fails to reclaim the pivotal **50-day SMA**, there may be a risk of further declines towards **$95,000 or even lower**. Conversely, a breakout past **$100,000** would be necessary to negate the prevailing bearish sentiment and regenerate bullish momentum in the market.
Conclusion
The recent data on Bitcoin’s market dynamics signals a **cautious outlook** as the cryptocurrency navigates through a period of intensified bearish momentum. With the IFP turning negative and critical resistance levels remaining unbroken, traders should remain vigilant. The potential for **significant downward movement** is present, emphasizing the importance of strategic positioning in this volatile market landscape.
