Bitcoin Price Forecast: Could BTC face deeper losses as pressure builds on the 200-day EMA?

• Deeper losses remain a risk for Bitcoin as it hovers around the crucial 200-day EMA on Tuesday; a decisive close below could pave the way for further declines.
• Institutional appetite appears to be weakening, with US-listed BTC spot ETFs posting net outflows of $398.62 million on Monday following last week’s withdrawals.
• Downside risks are mounting as a decline in BTC’s price, coupled with rising Open Interest, points to an increase in bearish positions.

The risk of a sharper breakdown looms over Bitcoin (BTC) as it approaches crucial support around $76,455 on Tuesday, following a decline of nearly 2% the day before. For the largest cryptocurrency by market capitalisation, a daily close below $76,455 would signal a deeper breakdown at this pivotal level. Institutional appetite is also weakening: spot Exchange Traded Funds (ETFs) registered outflows of over $398 million on Monday, extending last week’s withdrawals. 

The cautious picture is reinforced by an increase in Open Interest (OI) even as prices decline. This combination points to more bearish positioning among BTC traders and a greater risk of a deeper correction.

Will weaker demand deepen BTC’s correction?

Investor appetite has continued to fade this week, as reflected in institutional flows. According to SoSoValue data, BTC spot ETFs saw outflows of $398.62 million on Monday, after net withdrawals of $202.59 million last week. A continuation and acceleration of these outflows through the week could leave BTC facing a deeper correction.

Are bearish positions building further?

A stronger bearish bias is evident in Bitcoin’s derivatives indicators. Across all exchanges, BTC OI has climbed sharply since mid-October, taking outstanding contracts to 701.44K BTC on Tuesday, their highest level since September 23. With prices falling as OI rises, the data suggests that fresh short positions are being opened. This signals a bearish outlook and increases the risk of further declines for the Crypto King.

At 0.91 on Tuesday, CoinGlass’ BTC long-to-short ratio is approaching its lowest reading in over a month. Readings below one reflect bearish sentiment, indicating that traders are positioning for a fall in BTC prices.

A previous report highlighted historical data suggesting that US congressional elections have weighed on Bitcoin as well as the President’s party. 

Market sentiment also remains under pressure from the aftermath of last week’s Binance security breach, which continues to constrain BTC’s attempts to recover.

Bitcoin technical outlook: Can BTC hold its crucial support?

With Bitcoin trading at $76,553 at the time of writing, the 200-day Exponential Moving Average (EMA) at $76,455 provides support just below the price, while the 100-day EMA at $77,774 limits the upside. Trading beneath the shorter EMAs points to a bearish near-term bias. On the daily chart, the Relative Strength Index (RSI) stands at 34, close to oversold territory, and the Moving Average Convergence Divergence (MACD) histogram remains negative. Together, these indicators suggest that downside pressure persists even as BTC approaches long-term trend support.

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

The first line of support on the downside lies at the 200-day EMA of $76,455. Holding above it would keep open the possibility of short-term recoveries towards the moving averages overhead. A sustained breach below 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.)