Bitcoin has experienced a significant decline, falling from a peak of $126,000 to $107,300 between October 6 and October 18, marking a 15% drop amid heightened market volatility. The asset struggled to maintain the $110,000 resistance level, which has been pivotal in preventing further declines. Notably, intense selling pressure was observed on October 16 and 17, pushing Bitcoin’s price below $105,000 before a modest rebound.
This pattern underscores bearish momentum and suggests that Bitcoin may remain under pressure unless it can recover within the $110,000 to $112,000 range. Analysts interpret the current downturn as a leverage-driven correction rather than a panic-induced sell-off, as seen during previous crises like FTX or Terra Luna. According to data from Glassnode, over 90% of Bitcoin’s supply remains profitable, indicating resilience among long-term investors.
Market Dynamics and Selling Pressure
The recent sell-off intensified when Bitcoin’s taker sell volume surged beyond $4 billion, reflecting heightened trading activity. This surge coincided with Bitcoin’s failure to maintain the short-term holder (STH) realized price at $112,370, which now serves as a critical resistance level. Historically, this price reflects the average cost for recent buyers, and continued rejection below this threshold may accelerate losses toward $100,000. Market analysts note that this level often influences traders’ decisions to hold or exit their positions.
Repeated rejections near the realized price have historically led to temporary capitulations, followed by periods of stabilization. As the market navigates these fluctuations, many traders are assessing potential strategies moving forward.
Technical Indicators and Future Outlook
Bitcoin’s relative strength index (RSI) has dropped to 34, its lowest level since April, signaling conditions that could indicate a potential market bottom. This decline mirrors patterns observed prior to the recovery trends earlier this year. Analysts are closely monitoring the 200-day exponential moving average (EMA), which Bitcoin has maintained for nearly six months. Current trends suggest a similarity to the March-April consolidation period, during which prices fluctuated before embarking on a gradual recovery.
If historical patterns hold, Bitcoin may enter another consolidation phase, potentially lasting several weeks before it regains upward momentum. Some market participants believe this trend reflects previous cycles where Bitcoin established itself around the three-day 100 EMA. Traders anticipate a gradual build-up in this phase, with renewed momentum expected once selling pressure subsides.
As the market evolves, investors remain watchful for signals indicating a recovery, balancing optimism against the reality of current market dynamics.
