The price of BTC has risen in recent weeks after bottoming out at $80,637 in November. However, this rally could be a sign of a dead cat bounce, a temporary rally that occurs during a bear market.
The daily chart shows that the coin has faced rejection at the 50-day exponential moving average (EMA). It has also remained below the Supertrend indicator, which it needs to surpass to confirm a rally.
Worse still, the value of BTC has formed a bearish flag pattern, which often leads to a sharp decline. It has already completed the formation of the inverted flagpole and is now in the flag section.
There are indications that the flag section is about to conclude, which could trigger a bearish breakout. The first target to watch will be the strong pivot and reversal level of the Murrey Math Lines tool at $87,500.
A drop below that target will indicate a further decline to last month's low of $80,637, which is -11% lower than the current level. This drop will lead to a further fall to the final support level at $75,000. This outlook coincides with the April low, as predicted by analyst Ted Pilows.
The bearish price prediction for Bitcoin will no longer be valid if it surpasses the key resistance level at $100,000, which coincides with the main pivot point of S&R.
One of the main risks for Bitcoin is that institutional demand has largely dried up in recent months.
For instance, Bitcoin ETFs are experiencing low demand from investors. Data from SoSoValue shows that all spot Bitcoin ETFs have totaled $237 million in inflows this year, raising the accumulated inflows to over $57 billion.
While these inflows are encouraging, they are much lower than in previous months. In fact, these funds have lost over $3 billion in inflows since November of this year. This represents a radical shift from what was happening months ago when these inflows were skyrocketing.
For example, they added $5.2 billion in May, $4.6 billion in June, and $6.02 billion in July of this year.
Meanwhile, data shows that fewer companies are announcing their Bitcoin treasury strategy. According to CryptoQuant, only 9 companies have announced that they will add BTC to their treasury this quarter, an 83% decrease from the 53 that announced it in the third quarter.
Moreover, only a few of the existing treasury companies. Strategy bought coins worth $900 million last week, while American Bitcoin bought more this week. However, these are exceptional cases, as companies like Mara and Metaplanet have paused.
Worse yet, there is now concern that some of these companies will begin to sell as their net asset value (NAV) declines. Others will sell to pay off their debt and other obligations, which will create more pressure.
