Bitcoin Retreats from $100K as Weak Demand and Bearish Signals Hint at a Deeper Pullback

Bitcoin’s (BTC) journey toward breaching the elusive $100,000 mark has hit a roadblock, with prices retreating to $94,500. A combination of waning U.S. demand and bearish technical indicators suggests the potential for an extended correction, with a downside target of $88,000 now in focus.

Options Data Signals Growing Bearish Bias

Deribit’s 25-delta risk reversal (25RR), a key metric that measures the cost of bullish call options versus bearish put options, has turned negative for the first time in a month, according to Amberdata. This flip indicates traders are prioritizing downside protection over upside bets.

Activity on Paradigm’s OTC trading platform further underscores the shift in sentiment, with traders unwinding call positions and increasing exposure to put options tied to BTC. The diminishing premium on long-dated calls reflects tempered expectations for a swift recovery.

Coinbase Discount Highlights Weakening U.S. Demand

The Coinbase premium, which measures the price difference between bitcoin on U.S.-based Coinbase and international exchanges like Binance, has slipped into negative territory. This reversal points to declining buying pressure from U.S. investors, who were instrumental in driving BTC’s rally from $70,000 to nearly $100,000.

Compounding the bearish narrative is a negative skew in Coinbase’s order book, signaling reduced confidence among stateside traders.

Bearish RSI Divergence Adds to Concerns

Bitcoin’s price hit a high above $99,000 last week, but the relative strength index (RSI) failed to follow suit, creating a bearish divergence. This divergence suggests fading bullish momentum and raises the likelihood of further downside.

Key Support Levels in Play

Technical charts highlight a crucial support zone between $87,000 and $88,000, which could serve as a buffer against a steeper drop. Despite the near-term bearish outlook, long-term indicators remain supportive, keeping the broader uptrend intact.

For now, bitcoin faces a critical juncture, with traders closely watching whether it can regain its footing or if bearish forces will push prices lower. As the market digests recent signals, volatility is likely to remain the norm in the days ahead.