Source: BitpushNews
On Tuesday, the cryptocurrency market continued its corrective trend.
BitPush data shows that BTC reached a high of $95,000 in early trading, but then came under continuous pressure. In the afternoon, the bulls tried to rebound, but encountered bearish resistance at $94,800 and briefly fell below $91,000. At the time of writing, the trading price of BTC is $91,646, down 2% in 24 hours. The Altcoin market performed even more weakly, with over 90% of the top 200 tokens by market cap recording declines.
The current total market capitalization of cryptocurrencies is $3.14 trillion, with BTC's dominance at 57.3%.
In the US stock market, the S&P, Dow Jones, and Nasdaq indices all closed higher, up 0.57%, 0.28%, and 0.63% respectively.
The reason for the decline may be the overheating of the leveraged market
Part of the reason for the decline in BTC may be due to the excessive leverage trading in the market, which, when the market fluctuates, leads to forced liquidations, further driving down the price.
Data analysis platform IntoTheBlock expressed a similar view, believing that the correction in BTC "can be attributed to" the rise in funding rates, ultimately leading the market to be biased towards bearishness. However, as the funding rates return to normal levels, further deleveraging should be limited.
Cryptocurrency futures market analyst Byzantine General pointed out that, based on trading volume, the current price trend of BTC is similar to some previous local tops. He said, "BTC is likely to experience a period of sideways consolidation at this time. However, some other cryptocurrencies may perform well during this period."
From a technical perspective, BTC may retest the liquidity zone around the psychological $90,000 level, and may even further decline to $85,000.
This is because BTC rose very rapidly from November 6 to November 22, without any obvious imbalance between buying and selling, and such rapid increases are usually followed by subsequent corrections to balance the supply and demand relationship. Therefore, BTC may retrace to previous support levels or even lower levels to digest the previous gains.
In addition, with the Relative Strength Index (RSI) falling below 50 for the first time since November 6, the bears are expected to dominate the price trend in the coming week, which may lead to BTC consolidating below $95,000.
Cryptocurrency research analyst CoinSeer believes that the important support for BTC is in the $85,000-$88,000 range, and a break below this could trigger large-scale cascading liquidations.
TradingView analyst TradingShot wrote: "The sharp correction in BTC yesterday caught the market off guard. There are a few fundamental reasons behind this: one is the fading of the post-election euphoria, and the other is the psychological pressure of the $100,000 level. However, there is a more important technical reason that has been overlooked."
The analyst pointed out: "As shown in the chart, there is a Fibonacci channel that has existed in the past three cycles (including the current one). This channel started from the strong rebound when the top was formed in December 2013. The top of that cycle was exactly at the 0.236 Fibonacci level, and this level has acted as a resistance in the bull markets of June 24, 2019 and May 11, 2024."
TradingShot said the recent correction is because BTC has touched the "first true resistance of the bull market cycle".
He explained: "This is the Fibonacci trend line that has recently (November 22) acted as a resistance to the uptrend. We can call this the 'first true resistance of the bull market cycle' because this is the first major resistance level encountered by the bull market cycle before the final top is reached. In the past two cycles, the tops have occurred at the 0.0 Fibonacci level, which is the top of the channel (the red circles in the chart). The red dot in 2025 is not a forecast, but just for comparison."
TradingShot also observed: "The duration of each bull market cycle has been around 150 weeks (1050 days) in the past, and if this pattern repeats, the top may occur in late September or early October."
He pointed out: "Trying to capture the top and sell is much better than giving an exact price target. Also interestingly, although BTC is technically facing resistance, the current uptrend started from the low on August 5, 2024, which is right on the 1-week MA50 (blue trend line). Technically, as long as this trend line remains valid, the cyclical bull market wave should be able to remain intact."
