Bitcoin, which saw a modest rally during the Christmas period, has recently witnessed a decline. The market participants appear to be booking profits, exerting downward pressure on the leading cryptocurrency’s price.
With weakening buying activity, BTC’s price may soon fall below the critical $90,000 mark. This analysis explores some of the reasons behind this projection.
Bitcoin Bears Apply More Pressure
BTC’s decline over the past few days has pushed its price below the Leading Span A (green line) of its Ichimoku Cloud indicator, where it currently trades. This indicator tracks the momentum of an asset’s market trends and identifies potential support/resistance levels.
When an asset’s price falls below the Leading Span A of its Ichimoku Cloud, it indicates weakening momentum and a potential bearish shift. The Leading Span A represents a near-term support level, so breaking below suggests diminishing strength in the asset’s uptrend.
Bitcoin Ichimoku Cloud. Source: TradingView
Further, the coin’s negative Chaikin Money Flow (CMF) confirms the waning demand for BTC. As of this writing, the indicator lies below the zero line at -0.02.
Based on price and volume, the CMF indicator measures the strength of money flow into or out of an asset over a specific period. As with BTC, when its value falls below zero, it indicates that selling pressure dominates, suggesting more outflow of money than inflow. This is a bearish signal that implies weakening demand and potential downward price momentum.
Bitcoin Chaikin Money Flow. Source: TradingView
BTC Price Prediction: Will $91,000 Support Hold?
Bitcoin’s next major support level, which lies at $91,488, may fail to hold if the demand weakens further. In that scenario, the coin’s price could fall below $90,000 for the first time since early November to trade at $86,697.
Bitcoin Price Analysis. Source: TradingView
However, if BTC experiences a resurgence in buying activity, this could propel its price above the dynamic resistance of $97,675 offered by the Leading Span A of its Ichimoku Cloud. A successful breach of this level could drive BTC’s price toward revisiting its all-time high of $108,230.
