Bitcoin Faces Rejection at Key Resistance, Eyes Potential Retracement

• Bitcoin faces rejection at $89,213.24, signaling potential retracement and increased volatility in the short term.
• Strong supply between $92,500-$96,500 limits upside, while HTF demand below $70,000 may provide key support.
• Altcoins like XRP and WIF could follow BTC’s movement, presenting both risks and buying opportunities for traders.

Popular analyst CredibleCrypto noted that following a significant upward surge, BTC encountered resistance. The price dropped to $87,070.48, marking a 3.29% decline. Before dropping to a low of $86,561.21, Bitcoin had previously peaked at $91,000.00. According to the market’s response, Bitcoin may completely retrace, which would impact XRP and WIF. 

BTC Price Action and Key Levels

At $89,213.24, Bitcoin tested the 100% Fibonacci retracement level, but it was unable to maintain above it. Bitcoin dropped as a result of this rejection, and it is currently trading below this level. Besides, the critical supply zone between $92,500 and $96,500 represents strong selling pressure where previous upward moves faced resistance. BTC approached this zone but reversed before entering, confirming strong supply.

On the downside, a demand zone appears below the $70,000 level. This high-timeframe (HTF) demand zone has historically attracted buyers, leading to price recoveries. If BTC continues its decline, this area may serve as a crucial support level. Moreover, the current price action remains highly volatile, with BTC oscillating between major supply and demand levels.

Market Sentiment and Potential Scenarios

There may be fresh positive momentum if there is a breakout above the immediate supply zone. But if $89,213.24 is not recovered, there can be more drops in demand regions. For long-term investors, a further decline might present purchasing chances.

Additionally, altcoins might move in together with Bitcoin, going through comparable declines before possible rallies. Bitcoin’s path as it engages with important technical levels will be decided by the next trading sessions.