Why Must Bitcoin Reclaim $83k Following Its Slip to $81k?

Bitcoin had one of its biggest declines on Thursday, slipping to a level not seen in almost two months. 

The apex coin opened trading at $89k but retraced to a low of $82,242. The slip to $84k marked the first since December 1, when it plummeted to $83,800 from $90,420. Although it rebounded, the asset posted losses exceeding 4%. 

Nonetheless, it ended Thursday slightly higher than its low, but lost over 5%. On the 1-day chart, BTC printed its first red candle of the week. It is not surprising, as a previous outlook noted that since failing to break above $89k, Bitcoin will dip below $85k. 

Interestingly, the apex coin broke above $90k on Wednesday. However, another analysis noted that the doji it formed signaled that buying pressure was waning. The article noted that a key event likely to cause a significant decline in the coming days was the US government shutdown.  

Initial Jobless Claim Overshadows Government Shutdown

The 4-hour chart shows that the downtrend began in the session at 8:00 and halted around $87,600. It continued upward during the next session but hit a brick wall. The downtrend resumed, and the apex coin is currently struggling to rebound.  

The shorter-term chart suggests that the decline was not the result of swift action. One reason for this was that the most feared event, the government shutdown, was averted. Investors received the signal and tried to stage a buyback in response. 

However, another bearish news made the rounds, causing a shift in traders’ resolve. The US Bureau of Statistics released jobless claims, and they were worse than the previous month.

The 1-hour chart shows that BTC hovered near $84k toward the end of the day. It previously bounced off $84k, surging slightly higher, but has tested the mark more than once already. Its prolonged stay in the support suggests significant demand concentration. 

Why $83k is Important

Looking back at how BTC trended on Dec 1, it suggests that $83k is very important. Additionally, the liquidation heatmap warns of dire consequences if it fails to reclaim this key level.

The map shows that the apex coin cruised past several levels amid heavy liquidations. As a result, the bulls are currently reeling from the loss of almost $830 million on Thursday. Nonetheless, the total rekt capital over this period exceeded $940 million. 

The situation is worse as of Friday, as the apex coin plunged to $81k a few hours ago. It is edging closer to $83k as of writing. However, the slight recovery is unable to reverse the over $947 million in liquidated long positions.

Away from the losses, there are no other densely populated areas with liquidations until $80k. In a nutshell, BTC will retrace to $80,000 if the rebound fails.

Nonetheless, the bollinger bands on the 1-day chart suggest a rebound is imminent after the drop below them. Additionally, the relative strength index is at 31, a level at which several buybacks have occurred. 

If the trend affecting the BB and RSI holds, further increases are almost guaranteed. Focusing on the bands, Bitcoin will reclaim $83,200 and surge. Its next target may be the middle band at $90,656.

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