Possibility of Bitcoin dropping below $110,000?
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In the world of cryptocurrency, Bitcoin is currently navigating a delicate phase, with profitability in decline and a shift in the long/short ratio suggesting a challenging period for the digital asset.
According to analysts, this does not necessarily mean the end of the bull market, but rather a potential cautious but still bullish medium-term outlook. The market sentiment and several structurally bullish indicators point towards a continuation of the bull market in the coming months, driven by growing investor confidence, ETF inflows, and declining exchange balances.
Despite the recent dip below €115,000, several experts expect the bull market to continue for at least a couple more months. The price predictions average around €145,000 by the end of 2025, with some forecasts peaking higher near €162,000 but also acknowledging potential dips to about €87,600.
Key resistance lies near €122,000, and support zones between €112,000 and €106,000 indicate that if Bitcoin fails to regain momentum soon, it may face further consolidation or a pullback towards these support levels in the short term.
The long/short ratio of Bitcoin has shifted into bearish territory, falling below 1 to settle at 0.96. This metric measures the proportion of bullish bets relative to bearish bets on the futures market. A ratio below 1 indicates traders are betting on a decline in the price of Bitcoin. This suggests a weakening of bullish conviction among investors using leverage.
As of the current date, Bitcoin is trading around €113,000, a drop of around 7.4% from its historical high of €122,054, which it reached in July. The percentage of the circulating supply of Bitcoin that is currently held at a profit has fallen to 91.71%.
The coming days could be critical for determining Bitcoin's future direction. An intensification of profit-taking could push Bitcoin towards the support level of €111,855. However, if new capital inflows enter the market, Bitcoin could regain momentum and target the key resistance level of €120,000.
It's important to note that a rebound in capital inflows or a shift in macroeconomic factors like Federal Reserve policy could trigger a bullish surge, but these catalysts are not expected imminently. The current situation places Bitcoin at a crossroads, indicating potential future changes in market sentiment or investor behavior.
The cryptocurrency market is facing a cautious attitude among leveraged traders, with the long/short ratio of 0.96 indicating a higher proportion of bearish bets compared to bullish bets. Despite the short-term volatility, the medium-term outlook remains cautiously optimistic.
This article was written by Simon Dumoulin, a cryptocurrency enthusiast since 2019.
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- As Bitcoin's long/short ratio indicates a higher proportion of bearish bets compared to bullish bets, investors might consider diversifying their portfolios, especially in sectors such as technology, where there are promising opportunities for investing in innovative finance solutions.
- In the rapidly evolving landscape of technology, fintech startups are increasingly attracting investors interested in the digital asset market, as they redefine financial services by integrating blockchain and cryptocurrency technologies, offering unique investing propositions.
