Support range between $98,000 and $101,000, seen as critical.
DonAlt warns of a potential 15% price drop to $90,000.
MVRV ratio falls below the 200-day moving average.
Bitcoin is showing signs of strain as technical indicators point to a possible short-term correction, despite the cryptocurrency maintaining levels above $103,000.
The market’s attention has turned to a narrowing support zone that analysts warn could trigger a steep decline if breached.
As of Thursday afternoon, Bitcoin is trading at $104,082, down about 1% over the past 24 hours.
Market watchers say price action around the $98,000 to $101,000 band will likely determine whether Bitcoin maintains its bullish momentum or heads for a notable pullback.
Key support range under pressure as analyst warns of reversal
Crypto analyst DonAlt has highlighted the $98,000 to $101,000 level as Bitcoin’s most important short-term support, noting that any breakdown below this area could result in a sharp 15% price drop.
A breach would place Bitcoin near $90,000, a level last seen in early May.
The analysis is based on a daily chart that appears unstable following what the analyst describes as a “false breakout” earlier this month.
Bitcoin surged to a new all-time high around $112,000 before retreating to the support zone.
According to DonAlt, such behaviour is often associated with market weakness.
In strong uptrends, price action usually builds on previous highs, rather than retracing to earlier consolidation levels.
The recent return to the support range could indicate a lack of follow-through from bulls and increased risk of selling pressure.
MVRV ratio falls below key threshold, raising concerns
Another widely followed metric is also pointing to a potential weakness.
Crypto market analyst Ali Martinez noted that Bitcoin’s Market Value to Realised Value (MVRV) ratio has fallen below its 200-day moving average.
Historically, such movements have preceded periods of correction or sideways price action.
The MVRV ratio compares the market capitalisation of Bitcoin to the average purchase price of coins currently in circulation.
A declining ratio suggests that investors, on average, are holding unrealised profits or losses that may affect their willingness to sell.
A drop below the long-term average typically reflects weakening conviction in current price levels and has often led to short-term downward moves.
Long-term charts remain intact, despite bearish short-term signals
While short-term indicators may suggest increased downside risk, longer timeframes continue to offer some reassurance.
According to DonAlt, both the weekly and monthly Bitcoin charts remain strong and consistent with a broader bullish structure.
He stated that the daily chart looks fragile at the moment, but longer-term trends are still supportive of higher prices ahead.
Bitcoin’s market dominance has also continued to grow, now standing at 64.61%.
This suggests that despite current volatility, investor confidence in Bitcoin over other cryptocurrencies remains relatively high.
Market sentiment is cautious as technical divergence grows
At present, traders are closely watching whether Bitcoin can remain above the $101,000 level, with sentiment divided between bulls who view the dip as a temporary pause and bears who expect a deeper correction.
The convergence of chart patterns and weakening metrics like the MVRV ratio has introduced an element of uncertainty, especially after Bitcoin’s rapid ascent to record highs.
With Bitcoin holding above the psychological $100,000 mark for now, traders may remain on edge until a clear direction emerges.
If the lower support levels fail, the next leg could be a quick drop to $90,000, a move that would reset much of May’s gains.
However, if support holds, the recent weakness may simply represent a consolidation phase before another leg upward.
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