Bitcoin Recovers as Leverage Flush Eases, but Technical Pressure Persists
Bitcoin is now showing signs of steadying the ship after a dramatic free-fall in leveraged positions, which wiped out nearly a trillion...
Quick overview
- Bitcoin is stabilizing after a significant drop caused by over-leveraged traders, leading to nearly a trillion dollars lost in the market.
- Despite short-term anxieties driven by macro pressures, the fundamentals for Bitcoin remain strong, suggesting a potential for recovery.
- Market strategists believe that once excess leverage is removed, investor confidence will rebound quickly, paving the way for a stronger market.
- Currently, Bitcoin is trading near $91,700, facing resistance at $92,800, with key support levels identified below.
Bitcoin is now showing signs of steadying the ship after a dramatic free-fall in leveraged positions, which wiped out nearly a trillion dollars from the market. Pundits say the downturn wasn’t due to a weakening of fundamentals but to a rapid liquidation cycle triggered by traders taking on way too much debt.
“Over-leveraged traders borrow heavily to amplify their positions and then, when markets turn, they get caught in a chain of liquidations,” said Nigel Green of Devere Group. Temporarily made it clear that, despite the heightened volatility, Bitcoin’s long-term investment still sounds. Historically, these kinds of leverage-clearing phases distort prices for a bit, but recoveries often come back faster than expected once the forced selling pressure eases.
Macro Pressures Driving Short-Term Anxiety
While the fundamentals are still looking good, the bigger picture is still influencing short-term sentiment. This includes things like:
- Uncertainty about how the AI & tech sectors will cope in the long term
- Rising tariffs worldwide are putting pressure on trade
- The Fed’s upcoming policy decisions
- Any changes in the labour market that might affect investor appetite for risk
“Those worries are having an impact on investor confidence, but they aren’t touching the underlying vision for where bitcoin or tech are headed,” Green noted. Markets seem cautious at the moment, rather than fundamentally weak – traders just need to unwind some risk and figure out how exposed they want to be.
Investor Confidence Expected To Bounce Back Quickly
Market strategists say that once excess leverage has been flushed from the system, investor confidence should begin to return. As borrowed positions get unwound, the underlying support strengthens, and it suddenly looks like it’s going to be a more solid recovery.
Green summed it up:
- Fear takes over during the selling frenzy
- Recovery foundations start to form once the selling pressure starts to subside
- Confidence tends to return sooner than people expect
Those who are bullish on digital assets think these shakeouts actually help the market by clearing out the weak hands and paving the way for a stronger comeback. With long-term demand trends still holding up, Bitcoin looks well-positioned to bounce back whenever sentiment improves.
Bitcoin Price Prediction Technical Outlook
At the moment, Bitcoin is still stuck in this descending channel, trading near $91,700 after another rejection at the mid-channel point around $92,800. The 20-EMA is still capping any attempts to go up, and the 200-EMA is still well above price – reinforcing the bearish bias overall.
The RSI is hovering around the middle of the range, showing some improvement but still not signaling a clear bullish move.
Key levels now look like this:
- Support: $89,148 → $85,235 → $81,399
- Resistance: $92,800 → $96,676
If Bitcoin drops below $89,148, it’s likely to accelerate the bearish trend and send the price further towards the deeper support zones. On the other hand, if the bulls can get a clean break above $92,800, they might have a chance to challenge $96,676 and shift short-term sentiment. At the moment, BTC is still under pressure, and the risks are still leaning to the downside unless it can convincingly break the channel.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save