Noida, India (CoinChapter.com) - Bitcoin prices are facing increasing challenges, falling from the psychological $100,000 level to nearly $94,600 as the Trump-inspired frenzy dissipates from the market. Bitcoin’s brief rally earlier this year following the election of a (so far) crypto-friendly president has been replaced by a more sober reality dominated by macroeconomic concerns.
Recession fears sparked by weak economic indicators in New Zealand, coupled with persistent inflationary pressures in key economies, have heightened global uncertainty. This shift in sentiment has dented the bullish momentum that Bitcoin saw earlier this year.
A recent tweet from greek.live highlighted 150,000 Bitcoin options expiring on December 27, with a put/call ratio of 0.69 and a maximum pain point of $85,000.
The accompanying open interest distribution chart shows a clear bullish bias, indicating that traders are optimistic. However, exchange net inflows (which dominated on December 27) give a warning sign that the influx of Bitcoin into exchanges may trigger near-term selling pressure.
The mixed signals highlight the conflicting forces facing markets: enduring optimism about long-term gains versus immediate concerns about profit taking and broader macroeconomic challenges.
Bearish Factors Based on On-Chain Data — Bull Run Losing Momentum?
Despite some signs of long-term resilience, the on-chain chart presents a narrative filled with short-term bearish pressure. Exchange net outflow data shows a worrying surge in green bars, indicating a continued inflow of Bitcoin into exchanges.
Cryptoquant’s data suggests that selling pressure intensified, particularly as traders moved assets off platforms, possibly in preparation for liquidations. Positive net inflows on Dec. 27 were consistent with a broader year-end selling trend, adding to bearish sentiment.
The narrative becomes clearer by comparing transaction flow data to the market value to realized value (MVRV) ratio, which has retreated from recent highs of 2.8, suggesting that Bitcoin may have entered an overbought phase.
A decline in MVRV suggests lower market profitability, which could trigger further corrections as over-leveraged traders unwind their positions.
Although currently in a neutral position, the Miner Position Index (MPI) has occasionally seen sharp swings, indicating an increase in miner selling. Historically, miners are strategic sellers, and they have recently liquidated some of their positions in response to price fluctuations, adding pressure on the supply side.
However, bears must remain cautious. Data from Greece.live shows that options are dominated by bullish positions, suggesting a fundamental bullish sentiment among institutional traders. In addition, exchange outflows earlier this month highlight the accumulation trend that may reappear after the macro environment stabilizes.
Therefore, despite the bearish bias of short-term indicators, the interaction between net outflows, MVRV and MPI reveals a complex market. Although the bull market has lost momentum, there is still potential to reignite momentum, which makes this a dangerous time for shorts. Therefore, retail traders may exercise caution before entering the market and wait for clearer signals from Bitcoin giants or the market as a whole.
EMA resistance keeps bulls in the lurch
The 20-day EMA (red line) trendline of the BTC/USD trading pair has been acting as a dynamic resistance since December 19, and bulls have so far been clueless on how to turn it into support. Bitcoin price suffered an immediate setback after slightly breaking above the trendline on December 25, with the coin trading near $96,300 on December 27.
A break above the EMA resistance level could pave the way for $104,400, a resistance level that coincides with the 0.618 Fibonacci retracement. Historically, this level has been a pivotal point during corrections. Above this, $116,700 and $132,000 will serve as the next significant resistance areas, highlighting the challenges for the bullish momentum.
On the downside, the 50-day EMA (purple) acts as an immediate support level. Below this, the .382 Fibonacci Retracement support around $87,400 becomes key. Volume analysis shows strong buying interest at this level, making it a key support area for the bulls. A break below $87,400 could result in a drop to $77,300, another key level supported by historical buying interest.
Volume analysis also shows a decrease in trading activity between $95,000 and $100,000, suggesting that price moves in this price range can be rapid and dramatic.
The RSI indicator is 47.87, reflecting neutral momentum.