Bitcoin (BTC) Price Drop Sparks Market Uncertainty. Will BTC Continue its Bullish Trajectory or Enter a Distribution Phase?

With BTC dropping to $80000 from its January peak of $102000, many traders and analysts are closely monitoring key technical indicators

Bitcoin (BTC) is currently in an uncertain phase, with recent price action sparking debates on whether the market will continue its bullish trajectory or enter a distribution phase leading to a bearish cycle.

In the past 24 hours, the altcoin has dropped 9.94% and trades at $83,137.49 at the time of writing, according to CoinMarketCap.

BTC drops to $83k as technical indicators and support levels are closely monitored.

Bitcoin has dropped to $83,000 from a January peak of $102,000, leading many traders and analysts to closely monitor key technical indicators along with support and resistance levels.

Analyst PlanB, the creator of the Stock-to-Flow (S2F) model, predicts BTC will hit an average price of $500,000 during the 2024-2028 halving cycle, with a possible range of $250,000 to $1 million.

PlanB sees Bybit hack spooking market, setting stage for Bitcoin's crossroads

In a recent YouTube video, PlanB attributes this decline to the $1.4 billion Bybit Ethereum hack, which has spooked the market.

While Bitcoin is known for its volatility even in bull markets, PlanB had anticipated new all-time highs rather than a significant dip of this magnitude.

He now sees the market at a crossroads—either continuing its bull run or entering a distribution phase that leads to a bearish cycle.

PlanB noted that the Relative Strength Index (RSI) fell from 76 to 63 but remains above 50, indicating that the market is still in an uptrend. However, it appears traditional finance investors, who are now more involved in Bitcoin ETFs, seem hesitant to push RSI beyond 70-75. They tend to sell when the asset appears overbought.

A Fibonacci extension analysis offers further understanding of Bitcoin’s potential price trajectory. Based on the daily chart below, the key levels are: 1.618 Extension ($105,218), 2.618 Extension ($112,559) 3.618 Extension ($119,900), and 4.236 Extension ($124,436).

For a renewed bullish trend, BTC must reclaim the $93,000 level, which has acted as recent resistance. Breaking above this could lead to a move toward $100,000, matching the 1.618 Fibonacci extension.

Conversely, failure to hold current levels might result in a drop to the 2-year realized price of $74,000, which historically acts as a strong support floor.

In other relevant news, On-Balance Volume (OBV) indicates a significant drop in inflow for Bitcoin (BTC), suggesting that investors are being more cautious.