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Bitcoin price has experienced a notable retreat over the past few days, with the futures market signaling the potential for further downside. Analysts are closely monitoring the possibility of Bitcoin testing the $100,000 level as traders increasingly adopt cautious positions.
Bitcoin’s Recent Performance
On Wednesday, June 18, Bitcoin dropped to $104,650, marking a 6.52% decline from its highest level this year. The dip reflects growing bearish sentiment in the market, as evidenced by data from Deribit. The platform reported that the put-to-call volume ratio climbed to 2.17, suggesting that more traders are purchasing put options as a hedge against further price declines.
Understanding Put Options
Put options grant investors the right, but not the obligation, to sell an asset at a predetermined price within a specific time frame. For Bitcoin contracts expiring on Friday, open interest in put options is heavily concentrated at the $100,000 strike level. This indicates traders are preparing for the possibility of Bitcoin falling below this psychological threshold.
Geopolitical Tensions Add Pressure
Market sentiment has been further dampened by escalating geopolitical tensions in the Middle East. On Tuesday, former U.S. President Donald Trump suggested that the U.S. might become involved in the conflict, potentially targeting Iran’s Supreme Leader, Ayatollah Ali Khamenei. Such developments have introduced additional uncertainty for global markets.
These tensions could exacerbate inflationary pressures worldwide. For instance, Brent crude and West Texas Intermediate prices have surged to $76 and $74, respectively. Additionally, global shipping costs are on the rise. In this environment, the Federal Open Market Committee may adopt a cautious stance, waiting to assess the broader economic impact of geopolitical events and proposed tariffs.
Rising Bitcoin Demand Amid Uncertainty
Despite the recent price drop, demand for Bitcoin remains strong. Spot Bitcoin ETFs recorded over $216 million in inflows on Tuesday, bringing total cumulative inflows to $46.26 billion. This signals continued interest in Bitcoin as an asset class, even amid broader market uncertainty.
“A hawkish signal from the Federal Reserve could strengthen the US dollar and trigger a test of the psychological $100,000 mark. The geopolitical situation remains a wildcard, where further deterioration would likely trigger another move down across risk assets,” noted an XBTO analyst.
Technical Analysis: Double-Top Pattern
From a technical perspective, Bitcoin’s price has formed a double-top pattern on the eight-hour chart, with a neckline at $100,300. This pattern is often associated with bearish market movements. Bitcoin has also fallen below its 50-period Exponential Moving Average (EMA) and is approaching the 23.6% Fibonacci retracement level.
Additionally, the MACD indicator has dropped below the zero line, further signaling bearish momentum. Traders are watching the $100,300 support level closely, as a break below this point could lead to a deeper decline toward the 38.2% Fibonacci retracement level at $97,560.
What to Watch Next
As Bitcoin continues to navigate a challenging macroeconomic and geopolitical environment, investors should monitor key technical levels and market sentiment indicators. The $100,300 support level will be a critical threshold to watch, as a breach could signal further downside risk.
While uncertainties remain, the strong inflows into Bitcoin ETFs underscore the asset’s enduring appeal as a hedge against traditional market volatility. Both beginners and intermediate investors should remain informed and consider diversification strategies to manage risk effectively.
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