Bitcoin Price Tumbles Toward $98,000: What’s Driving The Drop And What Lies Ahead
On Thursday, the Bitcoin price fell toward the $98,000 mark, with November shaping up to mirror October’s performance as the market’s leading cryptocurrency continues to hit lower lows over the past month, confirming a prevalent downtrend in the market.
Bitcoin Price Uncertainty Grows Post-Government Shutdown
This downturn is indicative of growing market uncertainty, particularly following President Donald Trump’s signing of a bill that ended the longest government shutdown in US history on Wednesday.
More concerning, market analyst Ali Martinez has suggested that the Bitcoin price may be forming a head-and-shoulders pattern. According to his analysis, this could set the stage for a significant drop to as low as $83,000. This would represent an additional 15% decline if the pattern holds true.
Adding to the worries for bullish investors, Bitcoin has recently fallen below its 200-day simple moving average (SMA), an historical key technical support for the cryptocurrency’s price in bullish cycles.
The expert now indicates that a break below this key level during bear markets often leads to significant declines, potentially leading the Bitcoin price under its realized price, currently pegged at $56,200. This would imply that BTC could see a further 42% drop from current trading prices.
Crypto Winter Looms
Despite the expectation of bullish catalysts such as increased liquidity and potential interest rate cuts by the Federal Reserve, along with positive macroeconomic data, the outlook for the Bitcoin price suggests the possibility of a new bear market.
Ali Martinez’s analysis implies that bearish sentiment is gaining momentum, raising concerns about an impending “crypto winter” unfolding for investors once again this year.
As of this writing, BTC is trading at $98,150, marking a loss of nearly 13% over the past thirty days and erasing most of the gains it had accumulated throughout the year. In this time frame, it has only posted a 9% gain.
Featured image from DALL-E, chart from TradingView.com