Bitcoin is trading near $95,000 after a steady decline that erased recent gains and pushed the crypto tycoon to a serious psychological level.
The market is currently waiting for investors to take the next decisive action, which could determine whether BTC rebounds or continues its downward trajectory in the coming days.
Bitcoin faces bearish divergence
Bitcoin’s dominance has been declining for several weeks, with a clear bearish divergence from the Stochastic RSI. Current control is 59.37%, down from 65.71% in June. At the same time, the Stoch RSI recorded a bearish crossover as the D line rose above the K line, indicating a change in market strength.
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This divergence, combined with the RSI entering overbought territory early, indicates that bullish momentum is weakening. Historically, this situation often precedes a price reversal or significant correction. As dominance declines and momentum wanes, traders face increasing uncertainty about whether Bitcoin will be able to sustain support at current levels.
Bitcoin’s MVRV Z-score has fallen to a 14-month low, indicating the asset is undervalued compared to historical norms. This indicator evaluates whether Bitcoin is above or below its fair value. At the moment, this indicator suggests that BTC is firmly in undervalued territory, which often indicates a major accumulation phase.
When the MVRV Z-Score hits a similar low, long-term investors typically start accumulating. This action supports price recovery as new demand flows into the market. Increased accumulation at current levels could give Bitcoin the momentum it needs to stabilize and reverse its recent downward trend.
Could Bitcoin price reverse?
Bitcoin is trading at $95,040 and remains at a psychologically important level. The decline further intensified after Bitcoin broke below the head-and-shoulders pattern last week. This breakdown fueled bearish expectations.
The head-and-shoulders pattern indicates a 13.6% downside with a target of $89,407. If investors remain bearish, Bitcoin could fall towards $90,000 and eventually reach the expected target. The combination of a decline in dominance and a bearish crossover strengthens the case for this downward move.
However, if investors intervene and accumulate at undervalued levels, Bitcoin could rebound towards $100,000. If the recovery is successful, the bearish theory will be invalidated and a reversal will occur, pushing the price closer to $105,000. This movement also invalidates the head and shoulders pattern.
