Bitcoin has been experiencing significant volatility and selling pressure since the beginning of February, leading to a downturn in altcoins and meme coins as bearish sentiment takes hold of the market. Analysts are now warning of a broader correction on the horizon, suggesting that Bitcoin (BTC) could see further declines before finding solid support.
One key indicator of the market sentiment is the 7-day average funding rate, which has been steadily decreasing since late January, now sitting at 0.004%. This represents an 85% drop from the peak in December, indicating a waning demand for leveraged long positions and a weakening speculative appetite in the market. Without renewed leverage and buying pressure, Bitcoin’s price action may continue to be choppy or corrective in the near term.
While the long-term fundamentals of Bitcoin remain bullish, the short-term outlook is uncertain, with the possibility of additional downside before a meaningful recovery can take place. Investors are closely monitoring key support levels that could stabilize the market and potentially lead to a new uptrend. However, until these levels are established, uncertainty and caution are dominating the crypto landscape as Bitcoin navigates this consolidation phase.
Currently, Bitcoin is trading around $96,500, with bulls struggling to reclaim the $100,000 level and establish it as solid support. The market remains under pressure, with bears keeping BTC below critical supply zones, raising concerns about further declines in the short term. The failure to breach key levels has emboldened bears, leaving the market in a state of uncertainty.
If Bitcoin fails to hold above current levels, a drop into the $90,000 demand zone could be imminent. On the other hand, a successful push above $100,000 could spark renewed optimism and pave the way for Bitcoin to challenge all-time highs once again. The $96,000 level is now a key battleground for bulls and bears, with its outcome likely to determine Bitcoin’s trajectory in the short term.
Overall, the market is characterized by indecision, with investors on edge as they await clearer signals on Bitcoin’s next move. The declining funding rates and weakening speculative appetite are adding to the uncertainty, making it crucial for traders to exercise caution and closely monitor key levels in the coming days.