The Bitcoin price has dropped below the key $100K support level, raising concerns about a potential crash. This sharp correction has affected the entire crypto market, which has seen a combined loss of over 8% in the last 24 hours. Will Bitcoin drop to $90K, or can it recover?
Why Is Bitcoin Price Down?
Several key factors have contributed to the recent decline in the Bitcoin price. While market corrections are normal, certain conditions have made this one more severe than usual.
1️⃣ Profit-Taking from Whales
Bitcoin recently surged to new highs, making it a prime time for large investors (whales) to lock in profits. After such major moves, whales often sell large quantities of Bitcoin, triggering a cascading effect on prices. As prices dip, it triggers stop-loss orders, leading to larger flash crashes.
2️⃣ Tech Stock Sell-Off
The equity market, especially tech stocks, has also seen a decline, pulling Bitcoin down with it. Bitcoin and stocks, especially large-cap tech stocks, have shown a higher correlation recently, and when the stock market is down, Bitcoin often follows. This broader market risk has fueled the selling pressure.
NASDAQ 100 2-hours chart - TradingView
3️⃣ Market-Wide Correction
The entire crypto market is down by 8%, not just Bitcoin. As Bitcoin sets the tone for the broader crypto market, any weakness in Bitcoin affects the price of altcoins. This market-wide drop is forcing many investors to exit risky positions, further intensifying the sell-off.
Bitcoin Price Analysis
The current price of Bitcoin (BTC) is just below $100K, with bearish signs indicating that the price could fall even further. The charts show that Bitcoin is forming a descending triangle pattern, a classic bearish signal that often precedes a larger sell-off.
One of the key indicators to watch for is the formation of lower highs. Every time Bitcoin tries to recover, it hits a lower price peak than before, which is a sign of increasing selling pressure. This suggests that buyers are unable to push the price higher, giving sellers control of the market.
Here’s a breakdown of the key support and resistance levels for Bitcoin:
- $100K – Psychological resistance. If BTC stays below this level, it could signal a deeper correction.
- $92K – Short-term support. This is the first major level to watch if Bitcoin continues its downtrend.
- $90K – Critical support. If BTC breaks below $90K, it could spark panic selling and trigger a much bigger market crash.
BTC/USD 2-hours chart - TradingView
What’s with the Bitcoin Flash Crashes?
Many traders have noticed flash crashes in Bitcoin’s price recently. These events happen when the price suddenly dips to a much lower level before bouncing back just as quickly.
But what causes flash crashes?
- Whale Liquidations: Large investors sell massive amounts of Bitcoin, creating a sharp drop in price.
- Buy Orders at Lower Prices: As Bitcoin's price falls, buy orders at key support levels get triggered, causing the price to bounce back up.
- Stop-Loss Cascades: Flash crashes can trigger stop-loss orders from retail traders, creating a cascading effect that further accelerates the crash.
These flash crashes are a sign that large-scale selling is taking place, and buyers are stepping in at lower prices to "buy the dip". However, if there aren’t enough buy orders, the price could keep dropping.
BTC/USD 2-hours chart - TradingView
Bitcoin Price Prediction: Will It Crash to $90K?
The big question on every trader's mind is: Will Bitcoin crash to $90K?
Given the current market setup, it’s not out of the question. If Bitcoin continues to form lower highs and fails to reclaim $100K, it could break the support at $92K.
If Bitcoin breaks below $90K, this could trigger a panic sell-off, as it’s a key psychological level. Below this point, there is little technical support, which means prices could drop rapidly.
BTC/USD 2-hours chart - TradingView
Here’s what to watch for:
- Bearish Scenario: If BTC breaks below $90K, the price could drop even further. Without strong support, panic selling could push Bitcoin toward $85K or even $80K.
- Bullish Scenario: If Bitcoin reclaims $100K, it could resume its bullish trend. This would invalidate the bearish triangle pattern and give buyers confidence to push prices higher.
What Happens Next?
The next few days will be crucial for Bitcoin’s price. The key to a recovery lies in reclaiming the $100K resistance. If Bitcoin manages to do that, it will signal that the bulls are back in control. However, if Bitcoin continues to form lower highs and breaks the support at $92K, a bigger crash could be on the horizon.
Here’s what to watch for:
- Watch the Triangle Pattern: Bitcoin is currently trading in a descending triangle, which typically signals a bearish breakout.
- $100K is the Key Level: If BTC can reclaim $100K, the bullish trend could continue.
- Flash Crashes Are a Warning: Flash crashes often signal the presence of large sellers. If they continue, Bitcoin could face more volatility.
If you’re trading Bitcoin right now, be prepared for increased volatility. The pattern of lower highs and flash crashes is not a good sign for short-term price action. However, long-term holders (HODLers) may see this as an opportunity to buy more Bitcoin at lower prices.
