Bitcoin (BTC) has entered the third week of 2025 facing mounting uncertainty, raising alarms among investors. After a troubling 5% decline last week, the world’s leading cryptocurrency has slipped below the crucial $95,000 support level, now trading around $94,146 during Monday’s early European session. The unexpected drop has reignited concerns of further market sell-offs, with technical indicators signaling the possibility of a larger downturn.
Market Sentiment Turns Sour Amid Rising Fear
Investor sentiment is shifting as uncertainty grips the market. Enthusiasm surrounding U.S. President Donald Trump’s potential re-election is diminishing, with fears of a "sell-the-news" scenario building ahead of his inauguration. Meanwhile, Bitcoin’s Fear and Greed Index shows an increase in greed among some traders, although whale activity appears to be slowing down. This combination of factors has added to market anxiety, signaling a potential turn toward risk aversion.
Recent data from Santiment reveals a troubling decline in crypto trading volumes, with levels falling to their lowest since just before the U.S. elections in November 2024. On top of that, the total supply of Bitcoin on centralized exchanges has surged by over 2,700 BTC (worth around $256 million) in the last 24 hours, suggesting a growing level of concern among investors.
Technical Indicators Signal Potential Bearish Trend
Bitcoin’s price charts are raising warning signs for investors, particularly with the formation of a potential head and shoulders (H&S) pattern on the daily timeframe. This classic bearish indicator suggests a possible decline in Bitcoin’s price. Additionally, the Relative Strength Index (RSI) is showing a divergence, hinting at a potential dip below the critical $90,000 threshold in the coming days.
Prominent trader Peter Brandt has weighed in on Bitcoin’s current market setup, highlighting the possibility of the H&S pattern unfolding, which could lead to a bear trap or a shift to a longer-term downtrend. Brandt warned that if the bearish pattern plays out, Bitcoin’s price could fall to a target range between $77,500 and $75,000.
Key Levels to Watch for Potential Reversal
Despite the bearish outlook, there is still hope for a reversal. Brandt pointed out that if Bitcoin can consistently close above $108,000, it could signal the beginning of a new bullish trend. However, until this level is breached, the market remains volatile, and traders are closely monitoring for signs of further downside movement.
As Bitcoin continues to navigate uncertain waters, the coming days could prove critical in determining its short-term direction.
