NOIDA (CoinChapter.com) — Bitcoin’s price has encountered increasing challenges, dropping from the psychological level of $100,000 to a low near $94,600 as the market lost the euphoria inspired by Trump. The brief surge that followed the election of a (currently) crypto-friendly president has given way to a more realistic scenario dominated by macroeconomic concerns.
Concerns of a recession stemming from New Zealand’s weakening economic indicators, along with persistent inflationary pressures in major economies, have compounded global uncertainty. This shift in sentiment has dampened the bullish momentum observed in Bitcoin earlier this year.
A recent tweet from Greeks.live highlighted the expiration of 150,000 Bitcoin options on December 27, with a put/call ratio of 0.69 and a maximum pain point of $85,000.
The accompanying chart displaying the distribution of open interest revealed a significant bullish bias, suggesting optimistic positioning by traders. However, net flows on exchanges (positive inflow dominance on December 27) paint a cautionary picture, indicating potential selling pressure in the near term as BTC floods exchanges.
These mixed signals underscore a market grappling with conflicting forces: lingering optimism for long-term gains tempered by immediate concerns of profit-taking and broader macroeconomic challenges.
Bearish Headwinds from On-Chain Data – Are Bulls Losing Steam?
The on-chain data presents a narrative fraught with short-term bearish pressure despite pockets of long-term resilience. Exchange Netflow data reveals a concerning increase in green bars, indicating sustained inflows of Bitcoin to exchanges.
Cryptoquant data suggests heightened sell pressure, particularly as traders move assets to platforms, potentially preparing for liquidation. The positive netflow on December 27 aligns with broader year-end selling trends, compounding bearish sentiment.
The narrative becomes clearer when comparing the exchange flow data with the Market Value to Realized Value (MVRV) ratio. The MVRV ratio has retraced from its recent peak of 2.8, signaling that Bitcoin may have entered an overbought phase.
Declining MVRV suggests reduced market profitability, which could trigger further corrections as over-leveraged traders unwind their positions.
Although currently neutral, the Miners’ Position Index (MPI) has experienced occasional spikes, suggesting an increase in miner sales. Historically, miners strategically sell their holdings, and their recent liquidation in response to price volatility adds pressure to the supply side.
However, bears should remain cautious. Greeks.live’s data shows a dominant call positioning in options, hinting at underlying bullish sentiment among institutional traders. Additionally, exchange outflows earlier in the month highlight accumulation trends that could resurface as the macro environment stabilizes.
Hence, while short-term indicators lean bearish, the interplay between netflows, MVRV, and MPI reveals a complex market. Bulls, though subdued, still have the potential to regain momentum, making this a precarious time for bears to become complacent. As such, retail traders would likely proceed with caution before entering the market, waiting for clearer signals from Bitcoin whales or the broader market.
EMA Resistance Has Bulls Struggling
The BTC/USD pair’s 20-day Exponential Moving Average (EMA) trendline has been acting as a dynamic resistance for the trading pair since December 19, and so far bulls have been unable to flip it into support. The slight rise above the trendline on December 25 was immediately rejected, and the token is now trading near $96,300 on December 27.
A breakout above the EMA resistance level could open the way towards $104,400, a resistance level that aligns with the 0.618 Fibonacci retracement. Historically, this level has been a pivotal point during corrections. Beyond this, $116,700 and $132,000 are the next major resistance zones, highlighting the challenges for bullish momentum.
On the downside, the 50-day EMA serves as the immediate support level. Below this, the 0.382 Fibonacci retracement support near $87,400 becomes critical. The volume profile shows strong buying interest at this level, making it a key support zone for bulls. A break below $87,400 could lead to a decline towards $77,300, another key level supported by historical buyer interest.
The volume profile also indicates reduced activity between $95,000 and $100,000, suggesting that price movements in this range could be swift and volatile.
The Relative Strength Index (RSI) at 47.87 indicates neutral momentum.
