Bitcoin (BTC) is showing signs of potential bearish momentum that could test critical support levels, with some analysts projecting a possible drop to $96,000. This comes after BTC’s recent rejection at the $106,000 level, highlighting growing market uncertainty.
Technical Analysis Points to Possible Correction
Prominent crypto analyst Titan of Crypto has identified a concerning Head and Shoulders pattern formation on Bitcoin’s daily chart. This bearish technical setup suggests a potential downside target of $96,000 if the pattern completes. The pattern’s neckline currently sits near the psychologically important $100,000 level.
Supporting this analysis, trader TraderXO notes BTC’s rejection at the 7-day Composite Volume Profile (COMP) Value Area High, with heavy selling pressure persisting around current levels. The analyst suggests that a break below key support could trigger further downside to $97,200.
Bullish Case Remains Strong Despite Short-term Risks
However, not all analysts share this bearish outlook. Several key factors suggest the broader bull market structure remains intact:
- Historical cycle analysis shows lengthening bull runs with shorter bear phases
- Previous ATH patterns indicate potential for new highs in Q4 2025
- Weakening US Dollar Index (DXY) typically supports Bitcoin appreciation
- Growing whale accumulation signals potential supply squeeze
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On-Chain Metrics Paint Mixed Picture
On-chain data reveals interesting developments in whale behavior. Large holders continue accumulating BTC, with recent data showing significant increases in whale addresses. This accumulation pattern historically precedes major price movements.
What to Watch
Traders should monitor these key levels:
- Primary support: $100,000
- Secondary support: $96,000-$97,200
- Key resistance: $106,000
- Volume profile: $103,000-$104,000 range
FAQ
What could trigger a bounce from current levels?
Increased institutional buying, positive macro developments, or a breakdown in the US Dollar Index could catalyze a recovery.
How long might this correction last?
Historical data suggests similar corrections typically resolve within 2-3 weeks during bull markets.
What’s the broader market outlook?
Despite short-term bearish signals, the longer-term bull market structure remains intact, supported by strong fundamentals and institutional interest.