Bitcoin Price Analysis for February 2: Are Key Support Levels Shifting to Resistance?

Summary:
Bitcoin continues to face significant selling pressure as former support zones transform into resistance levels, influencing the market's near-term direction.

Key Takeaways

Bitcoin (BTC) has decreased by 4.1% in the last 24 hours, currently trading around $75,441.
The cryptocurrency has dropped nearly 14% over the past week, primarily influenced by various macroeconomic challenges.
Major Fibonacci levels indicate a bearish trend, suggesting further downside movement could be imminent.
More than $254 million in Bitcoin liquidations occurred in just one day, with long positions being heavily impacted.

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Current Market Conditions

Bitcoin (BTC) has experienced an uptick in selling pressure, falling 4.1% in the last 24 hours to a price of about $75,441. During the trading session, BTC fluctuated between highs near $79,049 and lows that approached $74,592. The broader trend remains unfavorable, with Bitcoin down roughly 14% for the week, close to 19% over the last two weeks, and more than 16% on a monthly basis.

The price chart for BTC displays a consistent decline throughout the day, marked by sharp downward moves, which suggests that market confidence is weak. Buyers are having a hard time reclaiming lost value, highlighting the challenges posed by a tough macroeconomic environment. Factors such as a partial U.S. government shutdown, renewed trade war discussions, rising long-term Japanese government bond yields, and escalating geopolitical tensions from unrest in Iran and the South China Sea are pressuring risk assets overall.

Considering these circumstances, it is crucial to examine whether Bitcoin can stabilize or if it continues to face risks of further decline.

Can Bitcoin Find Stability?

Bitcoin’s daily chart indicates a significant breakdown beneath critical Fibonacci extensions, which points to strong bearish control. The price fell below the 1.0 Fibonacci level at $84,440 and has also dipped below the 1.618 extension at $76,150, which previously served as an important target for downside movement.

BTCUSD Price Chart

This drop suggests a growing downside momentum rather than just a temporary pullback. With this extension lost, the focus now shifts to the demand zone around $62,735, which last appeared in October 2024. Buyers might attempt to stabilize prices at this level; however, the current setup indicates that support is weak and reactive rather than robust.

On the upside, what was once support has now become resistance. The 0.618 ($89,565) and 0.786 ($87,371) retracement levels stand out as critical resistance bands, coinciding with previous price congestion and unsuccessful recovery attempts. As long as Bitcoin remains below these levels, any upward price movements are likely to be corrective, with sellers likely ready to defend against rises.

Momentum indicators further support this bearish perspective. For example, the MACD has firmly crossed into negative territory, with both the signal line and histogram moving lower, showcasing an increase in downside momentum. Currently, there are no clear signs of bullish divergences, indicating that selling pressure is still prevalent. Until momentum indicators show signs of flattening or an early reversal, the technical outlook suggests that risks for further declines remain.

Bitcoin Liquidation Statistics

Over the past 24 hours, total liquidations in Bitcoin reached approximately $254.92 million, with long positions representing $203.14 million, while short positions accounted for $51.78 million. This data showcases how heavily the market penalized bullish positions during this sell-off.

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In shorter timeframes, this trend continues. In the last 12 hours alone, liquidations totaled $181.87 million, with $142.15 million from longs and $39.73 million from shorts. Even within a 4-hour span, liquidations for long positions were at $84.61 million, significantly larger than the $13.50 million for shorts, indicating ongoing pressure on leveraged buyers.

Disclaimer: This article is for informational purposes only and should not be interpreted as financial advice. The opinions expressed are those of the author and do not necessarily reflect the views of The Crypto Basic. Readers are encouraged to conduct their own research before making any investment decisions. The Crypto Basic is not liable for any financial losses.