Bitcoin price forecast: Resilience at $95k support as leverage reset spur recovery
Bitcoin's $95,000 support holds strong amid bearish pressures and bullish signals
Bitcoin’s recent price action showcases a critical balancing act between bearish pressure and bullish optimism.
After tumbling from $101,000 to $94,000 on December 9, wiping out $2.9 billion in leveraged positions, Bitcoin rebounded to trade near $98,000 during Wednesday’s European session. With key support at $95,000 reinforced by the 200-day EMA, market participants are closely monitoring these levels for potential catalysts to drive further gains.
Bitcoin’s $95,000 support zone proved resilient this week, cushioning declines twice after the earlier dip from $101,000. The 200-day EMA adds another layer of strength to this level, serving as a critical anchor for price stability. These indicators align with a broader bullish channel established since Bitcoin crossed $85,000 in November, suggesting the uptrend remains intact despite short-term volatility.
The crash to $94,200 temporarily spooked the market, with Bitcoin's Relative Strength Index (RSI) slipping to 35. However, the RSI has since recovered to 50, a neutral reading indicating a gradual resurgence in buying momentum.
Leverage reset signals healthier Bitcoin outlook
BTC price dynamics (November-December 2024). Source: TradingView.
The recent price drop had a silver lining, flushing out excessive retail leverage. Bitcoin's funding rate, which peaked at 9% per month on December 5, went flat after the decline, reducing the risk of cascading liquidations. Open interest in Bitcoin futures also declined 8% from November 25 to December 10, from 663,700 BTC to 609,400 BTC. This reset has left the derivatives market in a healthier state, creating room for bullish positioning.
With leverage reduced, institutional demand rising, and technical indicators stabilising, Bitcoin appears well-positioned for further upside as the $95,000 support level remains intact.
Technical indicators suggest that crucial support zones may cushion any further loss. Traders now adopt short-term strategies and market liquidity is thinning as Bitcoin faces intramonth volatility.
