Bitcoin Price Declining Between Support Zones In Fibonacci Retracement Levels

Bitcoin's current price action aligns closely with the Fibonacci retracement levels often used by traders to determine support and resistance.

Bitcoin (CRYPTO: BTC) took another hit on Monday, continuing a three-day decline that began following an all-time high on Friday.

What Happened: BTC fell by 4.86% over the past 24 hours, trading at $97,950 at the last check on Monday morning.

The world’s apex cryptocurrency slipped below the critical $100,000 price point on Monday. BTC encountered resistance at the 0.786 level on the Fibonacci retracement.

A technical analyst on the TradingView platform suggested that the Bitcoin decline is part of a broader trend in the investment markets.

The analyst also pointed to a potential price bottom during the current decline.

Technical Analysis: A Deeper Dive Into Bitcoin’s Price Action

A closer examination of Bitcoin's price movements on TradingView reveals a clear depiction within the Fibonacci retracement levels, which are frequently utilized by traders to identify support and resistance zones.

According to the analysis, BTC's pricing is currently situated within a support zone on the 4-hour timeframe, specifically between the 0.618 and 0.786 retracement levels.

This zone is being examined following Bitcoin's recent all-time high of 108,135, which was encountered three days ago.

Historically, this range has served as a strong support zone, with BTC displaying a tendency to rebound from these levels.

The analyst highlights Bitcoin's affinity for bouncing at the 0.786 level, suggesting that the cryptocurrency could encounter a temporary bottom around this range, which translates to a price point just below the $95,000 level.

As mentioned earlier, BTC found support at the $96,000 level on Monday, but Fibonacci retracements indicate that the cryptocurrency could potentially decline further.

The analyst suggests that BTC could overshoot and bottom out at around $93,800. However, any move lower than this level could trigger a more significant sell-off in the cryptocurrency.

Correlating with Sell-Offs in Stock Indexes

A crucial factor influencing Bitcoin's recent decline is the sell-off in major U.S. stock indexes.

Despite the inherent contrast between the crypto industry and the traditional finance world, the introduction of Spot Bitcoin ETFs has fostered a close relationship between the two domains.

This synergy has rendered BTC more susceptible to price movements and overall sentiment in the broader markets.

As noted by the analyst, the S&P 500 Futures, Nasdaq Futures, and Dow Jones Futures recently experienced a significant pullback from the 1.618 Fibonacci reverse extension levels on the weekly candlestick timeframe.

This correlation is further highlighted by data indicating substantial outflows from Spot Bitcoin ETFs in the United States.

According to data from SosoValue, these ETFs encountered outflows of $680 million on December 19, halting the trend of 15 consecutive days of inflows.