Bitcoin Drops Below $107,000, Faces Further Decline to $100,000

Bitcoin (BTC) has recently experienced a notable decline, slipping below key support levels, which has raised concerns about a potential deeper drop in its price. The cryptocurrency has been trending downward, approaching the $106,000 horizontal support level. This downward movement has sparked speculation about whether a bounce will occur from this level or if the decline will continue further.

The daily timeframe chart indicates that if uncertainty persists, the price of BTC could drop towards $100,000. This scenario is particularly concerning given that the cryptocurrency has already slipped below two crucial support levels, making a revisit to the $100,000 level seem increasingly likely. The current market conditions suggest that BTC is at risk of a deeper drop, which could have significant implications for investors and the broader cryptocurrency market.

Bitcoin (BTC) pulled back to $105,250 on Tuesday after failing to cross above the $109,000 mark on Sunday and Monday. Analysts said in a market report that Bitcoin could have formed a local top or may enter a period of consolidation. The upsloping moving averages signal a slight edge to the bulls, but the relative strength index (RSI) near the midpoint suggests a lack of bullish momentum. If the price slips and sustains below the moving averages, the BTC/USDT pair could slump to $104,500 and below that to $100,000. Such a move retains the pair inside the bearish descending triangle pattern.

The bearish setup will be invalidated if the price rebounds off the moving averages and rises above the downtrend line. That could propel the pair to the neckline of the inverse head-and-shoulders pattern. The pair has broken below the moving averages, indicating profit-booking by the short-term traders. Buyers are expected to defend the $104,500 level with all their might because if they fail in their endeavor, the pair could sink to the psychological support at $100,000.

The first sign of strength will be a break above the 20-exponential moving average. That clears the path for a rally to the downtrend line, where the bears are expected to step in. If buyers pierce the downtrend line, the pair may challenge the all-time high at $111,980. Analysts have predicted that if Bitcoin can maintain support above $105,000, the next leg up could potentially send it beyond $120,000 by late Q3 2025. However, the recent price action has not been favorable, with BTC dropping below $107,000 despite exchange reserves hitting a six-year low. This discrepancy highlights the volatility and unpredictability of the cryptocurrency market, where technical support levels and exchange reserves do not always align with price movements.

The current situation underscores the importance of monitoring key support levels and market sentiment. As BTC continues to navigate through these challenging conditions, investors will be closely watching for any signs of a potential recovery or further decline. The cryptocurrency market is known for its volatility, and the recent price action serves as a reminder of the risks involved in investing in digital assets.