Is Bitcoin Going to Crash? The “Death Zone” Signals a Potential Downturn

Bitcoin’s market is showing several warning signs as investor sentiment soars to extreme greed levels.

The Fear & Greed Index has surged to 84, a number that has historically been a red flag for potential price corrections. Adding to the tension are key on-chain data metrics like the Sell-Side Risk Ratio and Net Taker Volume, which suggest that Bitcoin could be nearing its market peak.

Bitcoin has already dropped 0.4% to $99,439 in just a few hours due to the growing negative sentiment.

Could the market be on the brink of a significant downturn, or will key economic reports this week change the game entirely? As uncertainty looms, a closer look at market trends and expert analysis could give us answers.

Experts Sound the Alarm: Bitcoin Nears Its “Death Zone”

10X Research analysts are warning investors to stay cautious. Their latest report highlights that Bitcoin is entering what they call its “death zone.” The term refers to altitudes above 8,000 meters in mountaineering, where survival becomes much harder due to reduced oxygen levels.

Similarly, Bitcoin’s market indicators suggest it is entering a critical phase where price momentum could weaken significantly.

For the past two weeks, Bitcoin has been trading within a tight range and forming a Doji candlestick pattern. This pattern is a classic sign of market uncertainty and indecision. While it can signal a period of consolidation, 10X Research suggests other signals indicate Bitcoin could be on the verge of a correction instead.

Trading volumes are falling, and buying interest at these higher price levels is weakening—both of which are key signs that Bitcoin may struggle to maintain its current price near $100,000.

The Market Is At Risk

Bitcoin’s on-chain data reveals more concerning signs. Trading momentum is slowing, investor interest is declining, and market sentiment is beginning to shift. These factors are raising the risk of a price correction.

While analysts don’t believe Bitcoin has already reached its peak, they emphasize that careful monitoring is vital in this phase. The market could either stabilize or face a downturn in the coming days.

Bitcoin Is Bleeding

Supporting bearish sentiment, Bitcoin’s intraday pullback of 1.74% led to $62.89 billion being wiped from the entire cryptocurrency market. Bitcoin’s total market cap is now $3.55 trillion.

Technical analysis suggests that a bearish reversal from a local resistance level could lead to a 12% price drop, with $87,680 as the next potential support level.

Liquidations have surged to $290 million as a result of this market downturn, with $217 million worth of long positions being wiped out. This indicates that selling pressure is growing, as investors react to the market’s current uncertainty.

Rising Wedge Pattern Adds to Bearish Signals

While some traders are still holding on to a bullish stance, technical analysis warns of further downside risks. A rising wedge pattern has formed, which is typically a bearish indicator. This suggests Bitcoin could see further price declines if the pattern continues to play out.

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What’s Next for Bitcoin?

The next few days could be critical for Bitcoin as key economic reports like CPI and PPI are released and market sentiment shifts. Will Bitcoin be able to maintain its upward trend, or will these warning signs lead to a significant correction?

Investors need to stay informed and monitor these trends closely. The market is volatile, and while opportunities exist, caution is key.

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