Bitcoin Drops 24.7% From All-Time High, Faces Resistance At $83,500

Bitcoin's price has been experiencing a challenging period, currently trading below the $83,500 mark, which represents a 24.7% decline from its all-time high of over $109,000 recorded in January. The cryptocurrency has been struggling to maintain momentum, with buyers facing resistance at the $83,500 level. This resistance is further highlighted by a bearish trend line forming on the hourly chart of the BTC/USD pair, which could limit upward movement in the near term.

The recovery wave from the $81,200 zone managed to push above the $82,500 and $83,000 resistance levels, but the upward momentum has since stalled. The price is currently trading below the 100 hourly Simple Moving Average, indicating that buyers are struggling to gain traction. The recovery reached the 23.6% Fibonacci retracement level of the recent decline from $89,042 to $81,177, but failed to continue higher.

Technical indicators present a mixed outlook. The hourly MACD for Bitcoin is losing pace in the bearish zone, while the hourly RSI remains below the 50 level, suggesting that sellers still have an advantage in the short term. However, some analysts remain optimistic, pointing to the Relative Strength Index (RSI), which has recently held its breakout level. Historically, this pattern has preceded upward price movements. Nevertheless, the Spent Output Age Bands indicator shows that over 1,057 BTC aged between 7-10 years recently moved, suggesting that long-term holders might be preparing to sell.

Market sentiment continues to worsen, with the CryptoQuant Bull Score Index reaching an extremely low level of 10. This index measures market sentiment for Bitcoin, with scores closer to 100 indicating bullish sentiment and scores approaching 0 indicating bearish conditions. The index has been signaling bearish conditions since Bitcoin was trading around $96,000, pointing to extremely low investor confidence in the short term.

Analysts have issued cautionary notes, stressing that Bitcoin needs to maintain its position within a key support channel and keep the weekly RSI above important support levels to avoid further correction. The major support levels for Bitcoin are currently at $82,200 and $81,200, while the major resistance levels are at $83,500 and $85,000. If Bitcoin fails to rise above the $83,500 resistance zone, it could start a fresh decline, with immediate support near $82,200.

Macroeconomic factors may provide some hope for a bull run. A breakdown of the US Dollar Index (DXY) below 100 could spark a rally for Bitcoin. Typically, a weak US dollar promotes risk-on behavior, allowing risk assets like cryptocurrencies to rally. However, recent tariffs on more than 100 of US trading partners have caused US stock markets and Bitcoin price to decline together. Arthur Hayes, the founder of BitMEX exchange, has noted that Bitcoin should eventually decorrelate from US tech stocks, suggesting that global imbalances will be corrected with printed money, which is good for BTC.

According to analysts, the two key Bitcoin price levels to watch include $80,000 and $90,000. A risk-on scenario would appear if BTC drops below $80,000 and recovers, or if the price climbs to $90,000 and shows strength above this level. The crypto market outlook remains uncertain in the short term, but many analysts believe that once the market stabilizes, Bitcoin could present a buying opportunity for long-term investors.