Cryptocurrency Crash Accelerates: Bitcoin Technicals Worsen, Traders' Sentiment Hits New Low

Technical Outlook Continues to Deteriorate, Full Signal of Downtrend Gathering

Bitcoin’s technical condition has become extremely dire. According to the latest chart data analysis, multiple technical indicators are simultaneously flashing bearish signals. This is not just random fluctuation but a systemic downward pressure.

The 50-day EMA has officially crossed below the 200-day EMA, forming the notorious “Death Cross”—a long-term bearish signal. When this golden cross is broken, it usually indicates that the sellers have taken control. More concerning is that Bitcoin is currently well below both moving averages, creating a large overhead resistance zone. Bulls need to regain these key levels to have a chance at a rebound.

The Average Directional Index (ADX) has reached 38.25, far exceeding the 35 level that indicates a strong trend. This suggests that the current decline is not a chaotic weak oscillation but a genuine and robust sell-off wave. Meanwhile, the Relative Strength Index (RSI) has fallen to 27.12, deep into oversold territory (<30)—Bitcoin has been “stretched to the limit like a rubber band.” Although extreme overselling often signals a potential rebound, this time it may only be a quick “bottoming out” rather than a trend reversal.

Behind the Crypto Crash: Demand Wave Has Diminished

From a market structure perspective, the sustained buying momentum supporting Bitcoin’s rise throughout the year has completely collapsed. The decline in core demand waves is the fundamental reason behind this round of crypto collapse.

Data shows that ETF purchase speeds have significantly slowed, corporate-level coin buying has basically halted, and institutional strategic fund purchases for the year have fallen to historic lows. This means the three driving forces that previously propelled the market upward have stalled. While Bitcoin may not crash immediately, its upward potential is increasingly limited. The price may remain stagnant below the 365-day moving average for a long period until the next demand wave emerges.

Currently, BTC is stabilizing around $94.23K, but this is still far from the year’s high of $126.08K. Since the beginning of the year, it has fallen more than 4%, and short-term holders are realizing losses at the fastest rate since the FTX collapse.

Trader Sentiment Reverses: Bearish Sentiment Overwhelms

In market forecasts, trader sentiment has flipped to an extreme bearish stance. Up to 73.3% of funds are betting that Bitcoin will fall to $85,000, while only 26.7% of traders believe it will rise to $115,000. This stark contrast fully illustrates the market’s pessimism.

The situation is similarly bleak for Ethereum. Users believe there is a 62% probability that ETH will drop to $2,500, far higher than the expectation of rising to $4,000. Currently, Ethereum is trading at $3.21K, approaching the market’s expected decline target. In contrast, XRP and Solana, despite upcoming ETF listings, still declined today, indicating limited optimism for small-cap coins.

BlackRock’s iShares Bitcoin Trust (IBIT) experienced its worst day since inception—a single-day net outflow of $523 million on Tuesday, setting a record. The ETF has experienced five consecutive days of net outflows, totaling over $1.4 billion, marking the highest total outflow in its 22-month history. These figures further confirm institutional investors’ pessimistic attitude.

The derivatives market has also shifted fully into risk-off mode, with options traders heavily buying puts, and implied volatility rising. Market compression indicators are flashing bearish signals, indicating downward momentum is building.

Support and Resistance for the Crypto Collapse: How Credible is the $85K Level?

From a technical perspective, if BTC loses the current tested zone of $88,000–$89,000, there is little support to prevent it from heading straight to $85,000 or even lower. The first Fibonacci support level is around $84,451; stronger support is at $71,486.

Considering the RSI is in an extreme oversold state, a quick dip to $85K is likely to be a rapid wick rather than a sustained breakdown. “Capitulation declines” in the market usually reverse quickly after liquidating leveraged longs—but only if there is sufficient buying support.

The upside path is extremely challenging. To rally to $115,000, Bitcoin needs to recover from the death cross and break above the descending trendline (around $100,492), which is a very difficult task. This also explains why less than a quarter of traders are betting on an upward move.

Key levels to watch:

• $92,000 — Near-term resistance
• $100,492 — Downtrend line resistance
• $84,451 — Strong support
• $71,486 — Major support

Conclusion: When Will the Crypto Collapse End?

The combination of declining expectations of a Fed rate cut in December, ongoing institutional fund outflows, and comprehensive technical deterioration has driven the current crypto collapse. In the short term, the market may continue testing lower supports. Active investors’ cost basis is around $88,600. If this level is broken, active investors across the cycle will be in overall loss for the first time, and bearish momentum could further dominate the market.

The coming weeks will determine whether buying interest can regain dominance or if support levels will further break down, deepening the downtrend. In the context of ongoing crypto collapse, traders should closely monitor these key levels; defensive strategies may be wiser than aggressive entries.