Bitcoin has collapsed below $90,000, reaching a low of $88,000 and causing significant liquidations within the market. While some traders have begun to buy the dip, network activity has plunged to new lows, indicating possible consolidation. The focus now shifts to whether Bitcoin can recover above $90,000 or if it will continue to decline towards $86,707 support.

Bitcoin has experienced a significant decline, trading below the $90,000 mark and recently touching a low of $88,000. The ongoing sell-off has led to approximately $881 million in liquidations within the crypto market, with Bitcoin alone accounting for $272 million. Given the market’s current conditions, analysts are wondering whether Bitcoin will continue to decline or potentially rebound from these lows.

At present, Bitcoin’s price is approximately $89,200, reflecting an 8.9% drop overnight, marking its lowest daily closing figure since November 18, 2024. The price chart indicates that Bitcoin has breached essential support levels, notably dropping below the 23.6% Fibonacci level. Traders are now focused on potential price movements as they assess the possibility of a rebound or further decline.

Despite the adverse market conditions, many traders remain optimistic. A significant buy-the-dip initiative has emerged, particularly on Binance, showcasing a long-to-short ratio of 2.88. This indicates that about 74% of accounts holding long positions are anticipating a bullish reversal, even as the total open interest in Bitcoin stays robust at nearly $60.05 billion.

However, the Bitcoin network activity has considerably weakened, with a notable decrease in the daily creation of new Bitcoin addresses. The current number stands at 240,534, with Active User Addresses dropping to 681.62K, the lowest levels observed since October 2024. These declining metrics suggest Bitcoin may be entering a consolidation or correction phase.

The $90,000 price point is critical for Bitcoin’s future movements. A persistent closing beneath this level may trigger a swift retreat to the next support level at $86,707. Conversely, if Bitcoin experiences a resurgence, it may encounter immediate resistance around $94,393, as dictated by the Fibonacci chart.

In conclusion, Bitcoin’s recent crash below $90,000 has raised concerns regarding its market stability, with significant liquidations recorded and network activity diminishing. While traders are injecting optimism into the market with buy positions, the network’s declining metrics suggest that a consolidation or correction phase may be on the horizon. Future price movements will largely depend on Bitcoin’s ability to maintain the critical $90,000 support or rebound towards higher resistance levels.

Original Source: thecryptobasic.com

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