Bitcoin’s recent decline to $92K was driven by leverage being removed and a reset in overly optimistic investor sentiment. The main question remains whether investors will take the opportunity to purchase at this dip.
Key Insights:
- Liquidations on Bitcoin long positions reached $233 million as spot selling remained low, indicating a reset instead of panic distribution.
- Sentiment dropped to 45% from 80%, coinciding with a decrease in open interest to $28 billion, confirming a mild risk-off scenario.
Bitcoin Sees Leverage Flush and Sentiment Decline
Bitcoin’s price dropped from $95,300 to $91,800, representing a 3.7% decline during the Asian market open, leading to significant long liquidations in the crypto space. Axel Adler Jr. highlighted that the Advanced Sentiment Index saw a sharp fall to 44.9% from 80%, indicating that market sentiment shifted abruptly from extreme bullishness to a more bearish outlook following the recent peak around $97,000.
Bitcoin Advanced Sentiment Index
Source: Axel Adler Jr./X
Further analysis suggests that a recovery above the neutral 50% sentiment threshold is necessary to stabilize prices, while a drop towards the 20% range could foretell a more significant correction.
Are Traders Ready to Buy the Dip?
From a technical viewpoint, Bitcoin continues to demonstrate higher price targets on daily charts. The $92K to $93K range is critical as it aligns with significant demand zones and monthly support levels, acting as potential support before another upward movement towards the $100K mark.
Bitcoin Price Analysis
Source: Cointelegraph/TradingView
Data from Hyblock Capital revealed that around $250 million in net long positions have entered the market around $92K, suggesting buyer interest instead of capitulation.
In summary, future price movements are expected to evolve within the established range if Bitcoin can maintain above $90K. As U.S. equity markets were closed, clearer trends may be evident in the upcoming days, allowing bulls to potentially regain control.
