Bitcoin once broke through the $90,000 support level

In recent years, with the rise in bond yields, investors’ attitudes towards risk assets have undergone significant changes, leading to capital outflows from higher-risk assets such as Bitcoin. This action has brought about price volatility in Bitcoin.

During the formation of a head and shoulders pattern, market sentiment often undergoes a shift from optimism to pessimism. In the bull phase, due to strong bullish market sentiment, prices continue to climb. However, after the market reaches its peak, many investors begin to take profits, causing prices to decline gradually and form the right shoulder. When the price breaks below the neckline, this bearish signal further confirms that the market will turn into a downtrend.

Based on the evaluation of multiple factors, it is expected that the Bitcoin price may fall to around $88,000. This price level not only corresponds to a psychological support level but is also an important support area indicated by several technical analysis indicators. Market participants need to closely monitor this potential low point and how it may affect future price movements.

Firstly, from a technical perspective, technical indicators such as moving average lines and the Relative Strength Index (RSI) all suggest that a market adjustment may occur. Bitcoin has recently broken through the key level of $90,000, which will have a negative impact on market sentiment. During this period, investor psychology becomes more cautious, with the fear index rising, potentially leading to more selling behavior. Additionally, the support level that may form near $88,000 is crucial for the rebuilding of buyers’ confidence. If the price remains below this level, it could trigger further downward trends.

In the context of current Bitcoin price volatility, short-term traders are advised to focus on technical analysis, using charts and indicators for quick decision-making. Short-term traders should set stop-loss ranges to limit potential losses and adjust strategies in a timely manner to cope with market changes. For long-term investors, market analysis shows that although Bitcoin has experienced fluctuations, historical data indicates that holding it long-term can still bring substantial returns. At the current price level, while considering the investment scale, assets should be allocated according to individual risk tolerance. Investors can choose to build positions in batches, gradually entering the market at different price levels, which can reduce the risks brought by price volatility. At the same time, it is recommended to regularly review and adjust the investment portfolio, promptly eliminate underperforming assets, and enhance the quality of holdings.