- Bitcoin failed to sustain upside momentum, remains under pressure from liquidation cascades, tighter financial conditions, weak ETF and spot flows, and policy uncertainty, with technical structure pointing toward further downside risk.
- Bitcoin continues the language during the trading session on Monday after initially trying to find some type of momentum to the upside.
- This is a market that has been disastrous over the last couple of months.
Now, there are multiple issues at the same time coming into the marketplace to cause chaos. To begin with, large leverage long positions have triggered cascade selling liquidations of people who, quite frankly, had no option but to get out, which continue to haunt the market.
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Rising interest rates or possibly central bank tightening expectations in some parts of the world could push risk-off sentiment. What is meant by that is more or less the Federal Reserve. While they did cut rates and they probably will continue to do so, it looks a lot like a central bank that is going to take its time, and that puts a little bit of a damper on Bitcoin.
Flows, Policy Pressure, and Technical Breakdown
ETF and spot-flow dynamics, net outflows or slowing inflows into crypto markets, continue to be a major issue. Then, of course, there are a lot of policy headlines out there causing issues. Exchange inflows, lower active addresses, and reduced miner selling support continue to all combine to cause problems.
It looks as if Bitcoin is probably going to try to get to the $80,000 level. The $80,000 level is an area of support. But if there were to be a breakdown below there, it could drop to 65,000 before it is all said and done. Recently, my analysis suggested the market was either forming a bearish pennant or a somewhat significant ascending triangle. Now it is starting to look more and more like that bearish pennant was the right call. This is a market that does not look like it can get out of its own way.
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