Bitcoin Price Drops Below $108,000 Amid Market Pressure
Bitcoin (BTC) is trading below $108,000 on Tuesday. It faced rejection from a key trendline, signaling more selling pressure. Overall risk appetite is weakening due to the US government shutdown and US-China trade tensions. Spot Bitcoin Exchange Traded Funds (ETFs) also saw outflows, showing cautious institutional interest.
US Government Shutdown and Trade Tensions Weigh on Markets
Bitcoin started the week strong, rising above $111,000 on Monday with a 1.74% gain. But gains were lost on Tuesday as BTC fell below $108,000. Investors worry the ongoing US government shutdown will hurt the economy. The Senate voted against reopening the government for the 11th time on Monday, extending the shutdown into its third week.
White House economic advisor Kevin Hassett said the shutdown will likely end this week. He added the Trump administration might take stronger steps if Democrats do not cooperate. Meanwhile, US President Donald Trump said a US-China trade deal is possible but warned tariffs could rise to 155% if talks fail. These issues keep pressure on risky assets like Bitcoin.
Institutional Demand for Bitcoin Weakens
Institutional demand for Bitcoin remains weak. Data from SoSoValue shows Bitcoin spot ETFs had $40.47 million in outflows on Monday. This marks the fourth straight day of outflows since mid-October. Last week saw the second-largest weekly ETF outflow since their launch. This trend highlights cautious investor sentiment.
Expert Opinion on Bitcoin’s Market Outlook
Fadi Aboualfa, Head of Research at Copper, shared his views on Bitcoin’s current market conditions:
- US-China trade tensions: “Price moves are driven more by headlines than actual policy changes. Bitcoin is moving like traditional risk assets, showing it trades as a macro risk-on asset.”
- Investor strategy: “Many investors may see this as a chance to accumulate Bitcoin gradually. Gold inflows are twice Bitcoin’s, and there are opportunities for rotation into Bitcoin.”
- Price forecast: “$100,000 is key support this week. If Bitcoin holds this level, it could rise to $120,000-$125,000 by the end of the month.”
Technical Analysis: Bitcoin Faces Key Support Levels
Bitcoin found support near the 61.8% Fibonacci retracement at $106,453 last Saturday. It then recovered nearly 4% by Monday. On Tuesday, BTC trades below $108,000 after rejection from a broken trendline.
If the correction continues, BTC could drop back to $106,453. The Relative Strength Index (RSI) is at 40, below the neutral 50, indicating bearish momentum. The Moving Average Convergence Divergence (MACD) also shows a bearish crossover.
However, if Bitcoin recovers and closes above the trendline, it could move up toward the 50-day Exponential Moving Average (EMA) at $113,818.
