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Will the short-term correction in Bitcoin (BTC) price lead to a sharp drop to the $90k mark before 2025?
Amid increased market volatility following the U.S. Federal Reserve’s rate cuts, Bitcoin quickly retested the $100k level. The increased supply and a surge in FUD (fear, uncertainty, and doubt) signal a potential correction.
While technical indicators suggest a potential bounce, a bearish shift in derivatives warns of a dip to $90k. Could continued institutional support be the game changer?
Bitcoin Price Analysis
After a massive 5.68% correction last night, Bitcoin formed a large bearish engulfing candle, temporarily dropping below the $100,000 psychological level.
Meanwhile, shorting after hitting a 24-hour low of $98,695, Bitcoin reclaimed the $101,000 level. On the 4-hour chart, Bitcoin’s price action shows a bullish reversal, breaking above the local support trendline.
There’s a minor reversal with lower price rejection just above the 23.6% Fibonacci level at $98,769. Additionally, Bitcoin has avoided closing below the long-standing support trendline.
The MACD and signal lines are in a steep bearish decline, and the RSI is nearing the oversold zone. These momentum indicators trigger a sell signal for BTC in the short term.
Bitcoin ETFs Inflows Continue, Open Interest Surges to $67B
Despite the correction, institutional support for Bitcoin remains strong. On December 18, BlackRock’s Bitcoin ETF, IBIT, saw an inflow of $359.6 million, while others experienced significant outflows. Overall, the daily net inflow for US spot Bitcoin ETFs was $275.3 million.
Amid the correction, Bitcoin’s open interest has risen to $67.75 billion, and trading volume has increased by 34%, reaching $146.38 billion. This surge in open interest reflects growing bearish sentiment, as the overall funding rate drops to 0.0101%.
Bitcoin Price Targets
From a bearish perspective, technical indicators and derivatives are signaling a sell. A close below the support trendline could likely lead to a retest of the $90,000 support level.
However, if the market stabilizes, the chances of a bullish rebound from the support trendline will improve significantly. Based on the Fibonacci levels, a potential uptrend could target the 50% Fibonacci level at $106,912.