Bitcoin Faces Volatility: Is a Bearish Trend Looming?

Bitcoin’s price has risen above $87,000 but has struggled to maintain levels above $88,000, raising concerns about a possible correction. A higher number of short positions on Binance indicates investor bearish sentiment. Despite a recent price increase and high trading volume, market dynamics suggest uncertainty, with potential resistance at $90,000 and support at $87,000 and $85,000.

Bitcoin’s price has risen back above $87,000 amidst ongoing market fluctuations. However, it struggles to maintain its value above the $88,000 threshold, indicating a notable liquidation point at this level. Despite this, Bitcoin’s market dominance continues to increase, leading to concerns regarding future price trajectories.

Technical sentiment suggests a potential bearish correction is on the horizon, as market participants adopt a cautious outlook on Bitcoin’s price prospects. With the BTC price stabilising, investors express fears of a significant downturn in the near future.

Current data reveals a substantial risk of a Bitcoin market correction this year. At Binance, the leading cryptocurrency exchange, the proportion of accounts betting against Bitcoin is markedly high. While 37.82% of accounts hold long positions, 62.18% have opted for shorts, underscoring a prevailing expectation of a price decline and contributing to market apprehension.

This sentiment is generating a fear of missing out (FOMO) scenario within the crypto community, typical during times of instability. Understanding the short-term market dynamics is crucial for making informed predictions regarding Bitcoin’s price this week.

Bitcoin’s price today sees a 3.46% increase, stabilising above $87,000. The cryptocurrency has also witnessed a remarkable 167.29% surge in intraday trading volume, reaching $37.66 billion, thus elevating its dominance above 63.5% for the first time in several months.

The Bitcoin chart displays a Golden Cross pattern across the 50/200-day exponential moving averages (EMA), indicating heightened buying pressure. Additionally, the Moving Average Convergence Divergence (MACD) shows an increasing histogram in the daily timeframe, suggesting positive momentum for the cryptocurrency this week.

Should the market favour bullish sentiment, Bitcoin may target its immediate resistance zone around $90,000. If bullish momentum persists, it could rise further towards the upper resistance at $91,150. Conversely, should bearish forces prevail, the Bitcoin price might descend to critical support at $87,000, with potential declines to $85,000 if bullish recovery falters.