Bitcoin fell to a five-month low before staging a modest recovery crucial support line which traders say could determine the fate of the bull market in the near term.
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According to Crypto Onchain, Bitcoin hit an intraday low of $98,900 before buyers pushed the price back above $101,000 and later to $98,900. $103,400 at the time of writing.
The top coin’s year-to-date gains are almost 10%, after peaking at a record high of $126,300 in October.
Bears break $107,000 fortress
Based on analysis of Crypto Onchain and on-chain data provider CryptoQuantBitcoin lost the $107,000 support after about 130 days of trading in a band between that level and $123,000.
The move led to heavy liquidations on the futures market. About $640 million in long positions were wiped out in a 24-hour period.
That figure is the second-largest daily long liquidation event since June 2021, according to market watchers. The October 10 event, by comparison, remains the largest on record.
The $101,000 level has taken on additional significance. Traders point out that bulls reached near $98,000, pushing the market back towards the lower trendline of a long-term ascending channel that has been holding since October 2023.
Reports have suggested that defending the bottom of this channel would be interpreted as a bullish sign, while a close below it could indicate deeper losses and a break in the market structure that supported the rally.
CME gap could drive price lower
A nearby gap on the CME futures chart is between $92,000 and $93,000, about 10% from current prices, and some analysts are watching that area closely.
Historically, Bitcoin has often filled such gaps before resuming its next leg, and the gap is now a possible target if bearish pressure continues.
At the same time, strong buying interest around the $101,000 zone could halt any decline and allow prices to rise again.
Liquidations and market sentiment
The cascade of liquidations increased selling pressure, especially among highly indebted traders. Futures positions were forced to close, amplifying the intraday decline.
Still, buyers quickly took advantage of the lower levels, and the recovery to the $103,000 level showed some demand at current prices. Short-term volume and momentum will be key to determining whether that demand is sustainable.
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Market participants say the main signal will be a daily close against the rising channel’s lower trendline around $101,000.
A sustained close above that level would likely be interpreted as a buying opportunity, while a decisive breakout and continued selling could open the way to the CME gap near $92,000-$93,000.
Broader moves in US stocks and the activity of big traders are also being watched as they helped drive the recent pullback.
Featured image from Unsplash, chart from TradingView