3 Warning Signs That Bitcoin Could Fall Beneath $90K: Godbole

Bitcoin Faces Resistance at $100K as Indicators Suggest Deeper Correction to $88K Possible

Bitcoin’s (BTC) attempt to break past the psychological $100,000 barrier has faltered, with prices slipping to $94,500. Market dynamics and technical signals indicate the potential for a broader pullback, with downside risks extending to the $88,000 range.

Options Market Shows Rising Bearish Sentiment

The 25-delta risk reversal (25RR), which measures the relative demand for bullish call options versus bearish put options, has flipped negative for the first time in a month, according to Amberdata. This shift suggests growing demand for protective puts, as traders position for further downside.

On Monday, activity on the Paradigm OTC liquidity network highlighted this bearish sentiment, with traders favoring put options and unwinding call spreads tied to BTC. Additionally, the premium on calls expiring in December and January has narrowed, further dampening optimism for near-term upside.

U.S. Demand for Bitcoin Cools

The Coinbase premium, which tracks the price difference between bitcoin on U.S.-based Coinbase and global exchange Binance, has turned negative. This indicates weakening demand from U.S. investors, a key driver of bitcoin’s recent rally from $70,000 to nearly $100,000.

A bearish skew in Coinbase’s order book adds to the concerns, signaling reduced appetite from U.S. buyers and increasing vulnerability to negative catalysts.

RSI Divergence Flags Weakening Momentum

The relative strength index (RSI) has failed to confirm bitcoin’s recent highs, diverging from the price action. This bearish RSI divergence suggests that the bullish momentum is losing steam, increasing the likelihood of a deeper correction.

Short-Term Price Levels to Watch

Technical analysis points to support in the $87,000-$88,000 range, where a potential floor could form if the pullback deepens. However, long-term indicators remain bullish, keeping the broader uptrend intact despite the current correction.

For now, the market faces a period of uncertainty as traders brace for further volatility. Whether bitcoin can regain its momentum or extend its slide toward key support levels will likely depend on shifts in market sentiment and macroeconomic factors.