BTCUSD prepares for corrective sell-off with $85,000 target

The BTCUSD rose moderately on Tuesday, moving 3.36% away from its all-time high of $99,588.

The stabilization of the exchange rate is causing mixed expectations in the market. On the one hand, institutional investors such as MicroStrategy continue to build assets, supporting demand for bitcoin. On the other hand, medium-term traders who bought the cryptocurrency in the $55,000-$70,000 range are actively taking profits, limiting further gains.

Record inflows into the main digital asset's ETFs, which reached $6.5 billion in November, indicate continued institutional interest. However, a growing focus on alternative assets such as Ethereum and Ripple suggests that investors are diversifying their capital, dampening bitcoin's momentum.

Market volatility increased following the news that $2 billion worth of bitcoins had been transferred from US government accounts to the Coinbase exchange. This raised fears of a possible massive sale. The digital currency's volatility fell to 64%, signaling a pause in buying activity. Meanwhile, Ethereum and Ripple are showing increased activity.

The BTCUSD market is likely to remain in a tight range as investors wait for new triggers for a movement.

The technical analysis of BTCUSD on the daily timeframe (D1) shows that the upward trend is still intact. However, the current growth is forming an uncertain pattern in the form of a triangle on the H4 timeframe. This may strengthen the positions of profit-taking traders and lead to another price correction. In addition, the Moving Average of the Oscillator (parameters 12, 26, 9) has entered the negative zone, confirming the strengthening of the bearish sentiment.

The short term outlook for BTCUSD suggests a decline with a target level of $85,000. Partial profit taking is recommended at 91,000.00, while a stop loss could be set at 103,000.00.

As the bearish trend is short-term, the trading volume should not exceed 2% of the total balance to reduce risks.