Bitcoin Price Forecast: Pressure on the 200-day EMA leaves BTC at risk of further losses

• The key 200-day EMA is in focus as Bitcoin trades nearby on Tuesday; a decisive close beneath it could pave the way for further losses.
• Net outflows of $398.62 million from US-listed BTC spot ETFs on Monday followed last week’s withdrawals, signalling softer institutional demand.
• With BTC prices declining as open interest rises, bearish positions appear to be building, heightening the risk of further losses.

After a decline of nearly 2% the previous day, Bitcoin (BTC) edges towards the key $76,455 support zone on Tuesday. For the largest cryptocurrency by market capitalisation, this is a pivotal level: a daily close below $76,455 would signal a deeper breakdown. Meanwhile, institutional appetite remains subdued. Spot exchange-traded funds (ETFs) registered outflows of over $398 million on Monday, extending last week’s withdrawals. 

The cautious outlook is reinforced by an increase in open interest (OI) as prices fall. This combination points to a build-up of bearish positions among BTC traders and a greater risk of a deeper correction.

Institutional demand weakens further

Outflows from BTC spot ETFs reached $398.62 million on Monday, following last week’s net withdrawals of $202.59 million, according to SoSoValue data. The figures underline a further weakening in institutional demand and investor appetite so far this week. Should withdrawals persist and gather pace through the week, BTC could face a deeper correction.

Bearish positions build in Bitcoin derivatives

A stronger bearish bias is evident in Bitcoin’s derivatives indicators. Across all exchanges, BTC open interest has climbed sharply since mid-October, taking outstanding contracts to 701.44K BTC on Tuesday, their highest level since 23 September. As this increase has accompanied falling prices, it suggests fresh short positions are being opened. That points to a bearish outlook and a greater possibility of additional losses for the leading cryptocurrency.

At 0.91 on Tuesday, CoinGlass’ BTC long-to-short ratio is approaching its lowest reading in over a month. Readings below one signal bearish sentiment, reflecting traders’ expectations of a fall in BTC prices.

Historical data, discussed in an earlier report, suggests that US congressional elections have had a negative effect on both the President’s party and Bitcoin. 

Market sentiment also remains under pressure from the repercussions of last week’s Binance security breach, which continue to constrain attempts at a BTC recovery.

Bitcoin technical outlook: BTC approaches pivotal support

At the time of writing, Bitcoin stands at $76,553, just above its 200-day exponential moving average (EMA) of $76,455, with the 100-day EMA at $77,774 acting as a ceiling. Trading beneath the shorter EMAs points to a bearish near-term bias. On the daily chart, the Relative Strength Index (RSI) is at 34, close to oversold territory, while the Moving Average Convergence Divergence (MACD) histogram remains negative. Together, these indicators suggest that downward pressure persists even as the price approaches long-term trend support.

Any recovery would first encounter resistance at the 100-day EMA near $77,774, ahead of the 50-day EMA at $80,098. Beyond those levels, the horizontal resistance zone around $85,000 presents a more significant hurdle.

The 200-day EMA at $76,455 provides immediate support. Holding above it would leave room for short-term rebounds towards the moving averages overhead; a sustained break beneath it, however, would likely leave BTC vulnerable to a deeper corrective phase.

(The technical analysis of this story was written with the help of an AI tool. Know more.)