After weeks of intense selling pressure, Bitcoin (BTC) has entered a consolidation phase, trading below the $85,000 mark and above $80,000. Bulls face a critical test as they must push BTC above $90,000 to prevent bears from driving prices lower.
Currently, Bitcoin is down over 29% since reaching its all-time high (ATH) in January, igniting speculation about a potential bear market. Sentiment remains cautious, with traders unsure whether BTC has hit its bottom or if further downside awaits. CryptoQuant data reveals a current phase of negative demand suggesting BTC distribution, a historical pattern that has often led to temporary corrections, though it hasn’t always signaled a full trend reversal.
According to recent analysis, Bitcoin demand has decreased by approximately -140K BTC, which is significantly lower than previous crisis outflows of -268K BTC and -437K BTC. Despite this localized selling pressure adding uncertainty, analysts suggest the scale of the current decline doesn’t threaten the broader bull market.
The crypto and US stock markets are both under pressure, struggling amid macroeconomic uncertainty and trade war fears, creating a challenging environment for investors. Bitcoin (BTC) has decreased nearly 20% since the start of the month, and the bearish trend seems poised to continue as sentiment remains weak. Yet, market fundamentals remain strong, with ongoing institutional adoption and potential catalysts such as the plans to create a strategic Bitcoin reserve.
Top analyst Axel Adler suggests that BTC’s decline is merely a phase in a typical market cycle rather than the onset of a prolonged downturn. He highlights that demand has dropped less dramatically compared to past crises, reaffirming that the current decline appears to be a short-term profit-taking event.
Moreover, the Federal Reserve’s tight monetary policy and recent inflation data have increased the pressure on risk assets, including BTC, fostering further volatility and a cautious investor sentiment. Bitcoin is currently trading at $84,300, struggling to regain momentum after several selling weeks. It now stands below the 200-day exponential moving average (EMA) at $85,500 but slightly above the 200-day moving average (MA) at about $84,000.
To confirm a recovery rally, BTC needs to breach the $85K level and push above $90K as soon as possible. Successfully reclaiming these levels would signal a resurgence of bullish momentum and might reverse the current downtrend, leading to a retest of higher resistance zones.
Failure to reclaim the 200-day MA and EMA could intensify selling pressure, posing a risk of a drop below the psychological support of $80K. Such a scenario could trigger panic selling, pushing BTC into lower demand zones and extending the ongoing bearish phase.
With market conditions remaining unpredictable, bulls must act quickly to elevate BTC above resistance and mitigate further downside risks. The upcoming trading sessions will be pivotal in defining Bitcoin’s short-term direction.
