After nearly a week of fluctuations, the cryptocurrency market experienced a downturn again during the Asian trading session on Thursday afternoon. Bitcoin fell below $112,000 around noon, with the latest quote at $111,838; Ethereum briefly dipped below the $4,000 mark, but has since rebounded to $4,033 at the time of writing. Both major cryptocurrencies, which are key to blockchain applications, are facing intense bearish attacks, putting important technical levels at risk.
The leading cryptocurrencies Bitcoin and Ethereum both declined, primarily due to the liquidation of over $1.7 billion in leveraged contracts on Monday and the uncertain overall economic outlook, which triggered risk-averse sentiment. The net outflow from U.S. spot ETFs has also heightened market concerns.
The current market weakness is not caused by a single factor but is the result of multiple negative news compounding. Firstly, the uncertainty surrounding the global macroeconomic outlook, particularly the U.S. Federal Reserve's interest rate policy direction, continues to exert pressure on risk assets. The market is concerned that if the Federal Reserve adopts a more hawkish stance to curb inflation, it will tighten market liquidity, which is detrimental to capital-driven markets like cryptocurrencies.
Secondly, issues within the cryptocurrency market itself have exacerbated this decline. Previously, there was an excessive amount of long leverage in the market, with many investors chasing gains using high-leverage contracts. When the market sentiment shifted and prices began to decline slightly, it triggered a large-scale chain liquidation, resulting in a sudden surge of selling pressure and a flash crash. On September 22 alone, the total liquidation amount across the network reached $1.7 billion, with over 400,000 traders being forcibly liquidated, marking a recent high.
Bitcoin Four-Hour Chart
The current price is fluctuating around $111,627, sitting at the critical support area of the 61.8% retracement level at $111,330. The resistance levels above are $112,588 (50% retracement), $113,487 (38.2% retracement), and $114,505 (23.6% retracement). Key support below is at $111,330; if this level is lost, it may drop to $109,537, with strong support at the previous low of $107,255. The price is at a critical juncture between bulls and bears, and the short-term trend will depend on whether it can hold the support and rebound.
From the Bollinger Bands indicator, the price has rebounded after touching the lower band multiple times and is currently operating near the lower side of the middle band. Whether it can break through and stabilize above the middle band will determine the sustainability of the rebound. If it continues to face pressure, it may test the lower band area of $111,000-$110,500 again. The MACD indicator shows that bears still have the upper hand, with the DIF line around -650 and the DEA at -684, but the distance between the two is narrowing, and the MACD histogram is gradually shortening, indicating weakening rebound momentum. If a golden cross forms, it will confirm a rebound signal; if weakness persists, it will maintain a downward fluctuation.
In the KDJ indicator, the J line value has dropped to a low of 18.43, indicating a short-term oversold rebound demand, but the K line value at 41.42 and the D line value at 52.92 remain weak. If a golden cross cannot be formed quickly, the market may continue to decline.
In summary, $111,300 is the key short-term support, with resistance above at $112,500 and $113,500. The technical analysis shows that there is a certain opportunity for a short-term rebound, but the weak MACD indicates limited rebound space, which may encounter resistance in the $113,000-$113,500 range. Overall, Bitcoin is at a critical turning point; although there is a demand for a rebound in the short term, the overall trend remains bearish, and caution is needed for the risk of a second decline after encountering resistance. It is recommended to closely monitor the breakthrough of the $111,300 support and the $113,000 resistance level.
In conclusion, the following recommendations are provided for reference:
1. If it effectively stabilizes above the $111,300 support and breaks through $112,500, the target can be set at $113,500; if it breaks out with volume, it may test $114,500.
2. If it effectively falls below the $111,300 support, it may quickly drop to $109,500 or even the previous low of $107,200.
Instead of giving you a 100% accurate suggestion, it is better to provide you with the correct mindset and trend. Teaching someone to fish is better than giving them fish; it is suggested to earn for a moment, but learn the mindset to earn for a lifetime!
Writing time: (2025-09-23, 16:30)
(Written by - Daxian Talks Coins) Disclaimer: Online publication has delays; the above suggestions are for reference only. Investment carries risks; please proceed with caution!
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