Bitcoin has
experienced a significant decline this week, with the cryptocurrency dropping
from its recent high above $100,000 to around $91,200. This sharp downturn has
sent ripples through the entire crypto market, triggering substantial
liquidations and traders uncertainty.
Let’s check
why Bitcoin is going down and analyze if BTC price can rebound in the coming
days and weeks.
Why Is Bitcoin Falling?
BTC Price Declined Three Days In a Row
Bitcoin’s
price during the Friday session on January 10, 2025, halted at a local support
zone, ending a three-day decline after briefly rebounding above the
psychological $100,000 mark.
From a
technical perspective, concerns arise as the price dropped below the 50-day
exponential moving average. However, the current levels align with the local
lows formed during the consolidation phase observed since mid-November.
Alongside
Bitcoin, other major cryptocurrencies also experienced losses, with similar
downward trends noted in XRP and Cardano.
Major cryptocurrencies have been falling in the last few days. Source: CoinMarketCap.com
At the time
of writing, Bitcoin changes hands at $94,300, rebounding from the local lows.
Bitcoin price chart. Source: CoinMarketCap.com
Let’s
examine the factors behind the recent decline in Bitcoin and other
cryptocurrencies .
Market Impact and Economic
Factors
The primary
catalyst for this decline has been stronger-than-expected U.S. economic data,
particularly in the services sector and labor market. This robust economic
performance has diminished hopes for aggressive Federal Reserve rate cuts in
2025, leading to a spike in Treasury yields and a strengthening U.S. dollar.
The market
reaction has been severe, with over $390 million in total crypto liquidations
occurring in the last 24 hours, of which approximately $54 million was
specifically in Bitcoin positions.
Bitcoin leveraged positions liquidations. Source: Coinglass.com
Government and
Institutional Factors
Adding to
the selling pressure is the U.S. government’s planned liquidation of 69,370
Bitcoins seized from the Silk Road marketplace. This substantial amount, valued
at approximately $6.5 billion, is scheduled for sale through the U.S. Marshals
Service, creating additional market uncertainty. Furthermore, institutional
sentiment has weakened, with significant ETF outflows and declining confidence among major investors.
Bitcoin Technical Analysis
and Market Outlook
Looking at
Bitcoin from a technical perspective, we see that the price is currently
utilizing the lower boundary of the consolidation channel formed since
mid-November. Although it has dropped below the previously mentioned 50-day
EMA, this should not cause concern for bulls and buyers. As long as the
sideways channel between the $91,000 support and the nearly $108,000 resistance
remains intact, bears are likely to stay on the sidelines.
Bitcoin technical analysis. Source: Tradingview.com
Moreover,
in my opinion, even if the current formation highlighted in purple on the chart
breaks, it could present an opportunity to acquire Bitcoin at more attractive,
lower prices. The next technical support level is around $80,500, marked by the
local highs from mid-November. Another support level lies just below $73,000,
corresponding to the October peaks. In my view, only a drop below this level
would signify that sellers are regaining control.
The
ultimate support zone separating buyers’ dominance from sellers’ lies near
$60,000, representing the lows from three months ago. I would consider any
movement above these levels as a healthy correction within an extended upward
trend.
Regarding
resistance levels currently visible on Bitcoin ’s chart, in addition to the
upper boundary of the consolidation channel, key levels include just under
$100,000, reflecting the peaks from the second half of November, and $102,700,
representing the recent highs established at the beginning of this year.
Bitcoin price support and resistance
zones
Type
Zone/Level
Description
Support
$91,000
The lower boundary of the current
consolidation channel.
Support
$80,500
Local highs from mid-November.
Support
$73,000
Peaks from
October.
Support
$60,000
Lows from three months ago,
separating buyers from sellers.
Resistance
$100,000
Peaks from the second half of
November.
Resistance
$102,700
Recent highs established at the
beginning of this year.
Resistance
$108,000
The upper boundary of the current
consolidation channel.
Bitcoin Price Prediction: Future
Prospects
Despite the
current downturn, many analysts maintain optimistic long-term projections for
Bitcoin. Standard Chartered Bank forecasts a price target of $200,000 by the
end of 2025, while other prominent analysts project values ranging from
$150,000 to $250,000.
These
bullish predictions are based on factors such as increased institutional
adoption,
