For the first time in over a week, Bitcoin dropped to $103,700 on Friday, 30th May, breaking below the $106,000 support level.
Bitcoin, the largest coin, saw a significant retracement, marking its fourth consecutive day of declines after being strongly rejected at the $110,000 level, following its recent all-time high. The bulls struggled to regain momentum as the bearish sentiment persisted, exacerbated by concerns over potential tariff resumptions.
The United States’ recent announcement of a 50% levy on EU goods, which was made last week, although delayed, continued to weigh on investor sentiment. Although the announcement has been made, the exact date it will take effect is not yet known.
The President showed his displeasure that China is not meeting its trade deal obligations and is taking the trade war pause for granted, thereby hinting at potential consequences. This geopolitical uncertainty is causing traders to be cautious and anticipate further bearish market developments.
Nevertheless, on-chain data already had pointers to the decline before it even began. A previous analysis pointed out the growing disenchantment with Bitcoin’s price performance. The article further pointed out that, despite the small FOMO (fear of missing out), it would still not be enough to sustain a sustained uptrend.
Despite CryptoQuant data indicating increasing demand growth. The downtrend persists, and Bitcoin remains at a high risk of future declines. An analytical post from the platform suggests that, although the asset remains bullish, it may still lead to a future retracement due to the bearish reading.
Prominent trader James Wynn believes that manipulation is occurring by certain entities in the cryptocurrency market, particularly in the derivatives market, which is heating up. He was able to reach this conclusion after the recent numerous liquidations over the last three days, which points to potential market control.
Furthermore, data from Coinglass reveals that the bulls lost more than $700 million on their long positions, potentially reinforcing concerns about market manipulation. Nevertheless, at the time of writing, Bitcoin is currently facing notable buying pressure.
Bitcoin Risks Slipping Below $100k
Bitcoin has slightly rebounded, pulling back to $104,676. The 2-hour chart displayed a doji candlestick, indicating renewed selling pressure, and a red candle, suggesting that bears are regaining control, thereby leaving Bitcoin vulnerable to further decline.
The average directional index has decreased, indicating the growing downward pressure that BTC is experiencing. The relative strength is currently at 50, reflecting intense selling pressure.
Meanwhile, Bollinger Bands revealed a potential surge, with BTC trading below the middle band since Wednesday and continuing to move its edge closer to the lower SMA.
The pivot point suggests that cryptocurrency may undergo a retest of the first resistance level at $101,800. If this level is not sustained, it could potentially slip below $100,000. It is worth noting that the exchange reserves are dropping, indicating that the asset is still experiencing remarkable buying pressure, even amid the retracement.
