Bitcoin (BTC) Price Eyes $89,500 Amidst Market Caution

Bitcoin (BTC) is currently trading at $85,539.92, but there are chances of the market experiencing significant ups and downs throughout the next 22 hours.

Bitcoin (BTC) faced potential price drops and a shift in market mood as it traded in a narrow range, encountering resistance at $85,539.92 by 09:00 ET (13:00 GMT).

The cryptocurrency's trajectory over the rest of the week remained quite uncertain with the market experiencing significant ups and downs throughout the next 22 hours.

This volatility stemmed in part from the instability in the bond market, which also affected stock prices. With the crypto market often following the same trends as the stock market, it absorbed some of the same energy.

Also, the Crypto Fear and Greed Index was at 31 on Wednesday morning, remaining in the realm of fear. The factors that made up this index included trading activity, online discussion about crypto, search engine trends, as well as Bitcoin's dominance in relation to other cryptocurrencies.

This fearful sentiment failed to drop despite a rise in the value of Bitcoin above a pivotal support level of $82,500.

Fear & Greed Index. Source: Alternative.me

Bitcoin Rainbow Chart Suggests Opportunity with Caution

For long-term investors, the rainbow chart, a colorful investment tool that shows BTC’s long-term trends, said it could be a good time to buy BTC, with the notion that the coin is still inexpensive.

The useful thing about the rainbow chart is that it can be used to identify interesting price levels for any time period—weekly, monthly, or even yearly.

Past market cycles have found Bitcoin's highest zone, labeled "Sell, seriously SELL!", coinciding with Bitcoin price peaks. Now, the chart suggests that if around late 2025 there is a similar pattern, BTC might touch $250,000.

Rainbow Chart. Source: Blockchain Center

Bitcoin Eyes $89.5K Amid Market Caution

As BTC's price continues to dwindle, fear remains the rule of the day, with many traders and investors across the landscape playing it safe. Despite BTC holding above important support levels, it hasn't been enough to increase their confidence.

However, this is interesting based on the fact that liquidation levels are beginning to cluster up around the $89,500 price zone, according to Coinglass data. When large amounts of liquidations begin to accumulate at certain price levels, they can act as a potential target for any asset.

BTC could spike towards the $89,500 level if there's a sudden burst of trading activity. This makes it an important level for traders to keep an eye on.