NOIDA (CoinChapter.com) — Bitcoin’s price has encountered increasing challenges, dropping from the psychological level of $100,000 to a low around $94,600 as the market lost the euphoria inspired by Trump. The brief surge that followed the election of a president who is currently friendly towards cryptocurrencies has given way to a more realistic situation dominated by macroeconomic concerns.
The fears of a recession caused by New Zealand’s weakening economic indicators have added to global uncertainty, along with persistent inflationary pressures in major economies. This change in sentiment has dampened the bullish momentum that Bitcoin experienced earlier this year.
A recent tweet from Greeks.live pointed out that 150,000 Bitcoin options expired on December 27, with a put/call ratio of 0.69 and a maximum pain point of $85,000.
The accompanying chart of open interest distribution revealed a significant bullish tilt, suggesting that traders were optimistic. However, exchange net flows, which showed a positive inflow dominance on December 27, indicated potential selling pressure in the near term as BTC flooded exchanges.
These mixed signals highlight a market that is grappling with conflicting forces: there is lingering optimism for long-term gains, but immediate concerns about profit-taking and broader macroeconomic challenges.
Bearish headwinds from on-chain data – are bulls losing steam?
Despite some signs of long-term resilience, the on-chain charts present a narrative that is fraught with short-term bearish pressure. Exchange Netflow data reveals a concerning increase in green bars, indicating a sustained inflow of Bitcoin to exchanges.
Cryptoquant data suggests heightened sell pressure, especially as traders move assets to platforms, potentially preparing for liquidation. The positive netflow on December 27 aligns with broader year-end selling trends, compounding the bearish sentiment.
The narrative becomes clearer when comparing the exchange flow data with the Market Value to Realized Value (MVRV) ratio. The MVRV ratio has retraced from its recent peak of 2.8, indicating that Bitcoin may have entered an overbought phase.
The declining MVRV suggests reduced market profitability, which could trigger further corrections as over-leveraged traders unwind their positions.
Although currently neutral, the Miners’ Position Index (MPI) has experienced occasional spikes, suggesting an increase in miner sales. Historically, miners are strategic sellers, and their recent liquidation of some holdings in response to price volatility adds pressure to the supply side.
However, bears must remain cautious. Greeks.live’s data shows a dominant call positioning in options, indicating underlying bullish sentiment among institutional traders. Additionally, exchange outflows earlier in the month highlight accumulation trends that could resurface as the macro environment stabilizes.
Therefore, while short-term indicators lean towards bearishness, the interplay between netflows, MVRV, and MPI reveals a complex market. Bulls, although subdued, still have the potential to reignite momentum, making this a precarious time for bears to become complacent. As such, retail traders would likely proceed with caution before entering the market, waiting for clearer signals from either Bitcoin whales or the broader market.
EMA Resistance Has Bulls Struggling
The BTC/USD pair’s 20-day EMA (red) trendline has been acting as a dynamic resistance for the trading pair since December 19, and so far bulls have been unable to flip it into support. The brief moment when BTC price went above the trendline on December 25 was immediately met with resistance, and the token is now trading near $96,300 on December 27.
A breakout above the EMA resistance level could pave the way towards $104,400, a resistance level that aligns with the 0.618 Fibonacci retracement. Historically, this level has been a crucial point during corrections. Beyond this, $116,700 and $132,000 are the next major resistance zones, highlighting the challenges for bullish momentum.
On the downside, the 50-day EMA (purple) serves as the immediate support level. Below this, the 0.382 Fibonacci retracement support near $87,400 becomes critical. The volume profile shows strong buying interest at this level, making it an important support zone for bulls. A break below $87,400 could lead to a decline towards $77,300, another key level supported by historical buyer interest.
The volume profile also indicates reduced activity between $95,000 and $100,000, suggesting that price movements in this range could be rapid and volatile.
The RSI at 47.87 reflects neutral momentum.