Bitcoin Drops 2.8% to $102.8K Amid Middle East Tensions

Bitcoin (BTC) has recently tested critical support levels, dropping below $102.8K due to escalating geopolitical tensions in the Middle East. The recent air strikes by Israel on Iran have intensified market uncertainty, leading to significant sell-offs. Despite facing numerous pressures in the past, the BTC price and the broader market are expected to withstand the current sell-off and potentially rebound.

The crypto markets have experienced over $1.1 billion in liquidations, while S&P 500 futures fell by 1.9% and crude oil and gold prices surged. From a technical perspective, the BTC chart pattern indicates worrying signs of further downside. The token has printed three consecutive daily bearish candles, wiping out the gains from earlier in the week. This has brought the token to a crucial level where a rebound could trigger a strong upswing, while a pullback could raise concerns.

The daily chart of Bitcoin shows the formation of an inverse head and shoulder pattern, which is generally considered bullish. However, to validate this pattern, the price must trigger a rebound from the lower support and rise along the curve to reach the neckline at around $110,500. If this occurs, the price is more likely to breach the neckline and form a new all-time high. However, technicians suggest a diverse price action, indicating the possibility of a pullback as the volume continues to drop.

The Chaikin Money Flow (CMF) has dropped below 0, suggesting an outflow of money or sell-off, while the Relative Strength Index (RSI) is maintaining a steep descending trend. The RSI has reached the ascending support, and a drop below these levels could initiate a fresh bearish trend, potentially driving the price lower. To prevent an excessive drain, possibly close to $100K or below, a daily close above the current levels is required. This could hinder the momentum of bears and eventually offer room for a consolidated ascending trend.

Therefore, the upcoming weekly close could have a significant impact on the next Bitcoin (BTC) price rally. Analysts' forecasts suggest that the price could either rebound to $105K or drop to $102K, depending on the market's response to the current geopolitical uncertainties and technical indicators. The technicians have turned bearish, leaving no scope for the token to initiate a recovery in the short term.