Bitcoin (BTC) in 'Pain' Mode, Top Analyst Explains

U.Today - A complicated picture is painted by Bitcoin 's current price action as the asset negotiates considerable market volatility. Bitcoin has swept both ends of its liquidity spectrum on the four-hour chart with bid liquidity at the bottom and clearing ask liquidity at the top. Due to the breaching of both resistance and support levels, this movement demonstrates Bitcoin's volatility.

The analyst notes that Bitcoin has now stabilized in a value region, suggesting that attention may be directed toward the Point of Control (PoC) and support levels close to $98,000. Although slipping below could result in another test of lower support zones, regaining this zone and holding above it would provide a basis for recovery.

Lower time frames show that external factors, especially its relationship to conventional financial markets, have limited the price of Bitcoin. Sell flows on the Bitcoin market seem to be a direct result of weakness in the equity markets, particularly in the S&P 500 (ES). This interaction shows how macroeconomic variables continue to have an impact on the dynamics of the Bitcoin market.

The significance of the New York session's low is one important finding. If Bitcoin is able to stay above this level, it may be a sign that passive bids are increasing, which could support a future upward move. On the other hand, falling below this low and running into pressure from passive sellers would indicate that the lower value is accepted, which could lead to a more significant correction.

Traders are encouraged to keep an eye on whether Bitcoin can maintain its position within the value area, even though the $98,000 level appears to be a crucial zone. Given that both liquidity extremes have already been swept, the next move will probably depend on whether Bitcoin can find and hold support or run the risk of entering a more significant pain mode with more declines. For a clearer direction during this volatile phase, Bitcoin traders should closely monitor key levels and pay attention to broader market cues.

Source: Investing.com