Bitcoin Faces 4.5% Drop, Key Support Levels at Risk

Bitcoin is currently at a pivotal juncture, with market dynamics suggesting a potential retracement to key support levels. Analysts are closely monitoring the situation, as a bearish trend could persist if these levels are not maintained, leading to deeper declines.

According to a notable analyst from COINOTAG, Bitcoin must hold the $97,000–$98,500 range to prevent a steeper drop towards $91,000. This warning comes as Bitcoin has experienced significant volatility, recently dropping over 4.5% to around $102,000. The decline is largely attributed to broader market conditions and macroeconomic factors, including a downgrade of the U.S. debt rating by Moody’s.

On May 19, despite reaching a local high above $107,000, Bitcoin’s relative strength index (RSI) indicated a lower high, signaling a bearish divergence. This discrepancy often precedes significant price corrections, as seen in recent trading actions. Market participants noted that Bitcoin’s penetration into higher liquidity zones, particularly between $104,000 and $106,000, ultimately resulted in a failure to sustain upward momentum. With immediate support now at risk, analysts are keeping vigilant watch on potential breakdown levels.

Bitcoin’s formation of an inverse head-and-shoulders pattern suggests a potential retest of the 50-period exponential moving average (EMA) near $91,000. Analysts are particularly focused on this setup, as it may indicate the last line of defense for bulls before heading into aggressive selling territory. Moreover, historical data indicates that failing to breach the neckline at $107,000 could lead to repeated bearish reversals witnessed in late 2024 and early 2025.

According to recent reports from trading platforms, Bitcoin’s recent drop aligns with similar patterns noted in previous market corrections. Analysts emphasize that while short-term bearish movements are concerning, a rebound from around $91,000 could set the stage for a potential surge back toward the psychological level of $150,000. Such technical and market-based assessments illustrate the importance of ongoing monitoring of Bitcoin’s price movements and accompanying market sentiment.

The current bearish trend in Bitcoin highlights the essential nature of critical support levels, particularly around the $97,000–$98,500 range. As the cryptocurrency markets navigate increased volatility, maintaining vigilance on price action will be crucial for traders and investors alike. Only time will reveal whether Bitcoin can reclaim higher ground or if it will face further declines.