Summary:
Bitcoin's bullish price action could be threatened by a potential executive order from President Trump.
Analysts predict a correction below $96,000 based on the diamond pattern.
Key support at $101,000 is critical to avoid market volatility.
Concerns over tightening monetary policy are influencing market sentiment.
Institutional buying may help stabilize prices despite bearish sentiment.
Bitcoin is currently experiencing a bullish day in price action. However, market reactions to a potential crypto-related executive order from President Trump on January 23 could lead to a significant correction in Bitcoin's (BTC) price. Some analysts predict that Bitcoin could dip below $96,000 due to emerging technical chart patterns, particularly as economic conditions in the U.S. tighten.
Bitcoin May Correct to $96,000 Based on “Diamond Pattern”
According to the “diamond” technical chart pattern, Bitcoin's price might face a correction below $96,000, indicating a potential momentum reversal. These patterns typically emerge at local price tops or bottoms and may signal a temporary trend reversal. Crypto trader Blackmore stated, "It’s quite a tricky setup; it’s usually best to wait for it to play out before making a move. The technical target for this is around $94,000 - $96,000."
Bitcoin’s Momentum and Key Support Levels
Ki Young Ju, founder and CEO of CryptoQuant, noted that Bitcoin might pull back or move sideways for several months. Despite this, he emphasized that the bull cycle might not be over, as other on-chain indicators remain bullish.
Can Bitcoin Maintain $101K Key Support?
Bitcoin's ability to maintain the key support level of $101,000 is crucial. Analyst Rekt Capital pointed out that Bitcoin has struggled to close above the $106,000 resistance. He mentioned, "Bitcoin has revisited the Range Low of $101,000 for a retest. Any downside wicks could see the price dip further."
A drop below $101,000 could lead to significant market volatility, triggering over $1.34 billion in leveraged long liquidations across exchanges.
External Pressures on Bitcoin Price
Concerns over tightening monetary policy are adding pressure to Bitcoin's price. Ryan Lee, chief analyst at Bitget Research, remarked that recent market dips and fears of global interest rate hikes have created a short-term bearish sentiment. However, institutional buying, particularly from World Liberty Finance, may provide some price stabilization.
Markets are currently anticipating the first U.S. interest rate cut to occur on June 18, according to the latest estimates from the CME Group’s FedWatch tool.
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