(MENAFN- Daily Forex)

• Bitcoin's sharp pullback is looking at $100,000 as a critical support level.
• A breakdown could trigger declines toward $92,000 or even $80,000, while resistance remains strong near $108,000.
• For now, the outlook appears sideways to bearish.

Bitcoin has fallen pretty significantly during the trading session on Thursday as traders continue to see the $100,000 level as important. The $100,000 level is an area that previously had been tested as both support and resistance. Now we find ourselves getting closer to it, and I think we have to watch whether or not that level breaks down. A breakdown opens up the possibility of a move down to the $92,000 level. Ultimately, this market could drop to $80,000 if the selling pressure continues.

As things stand right now, we still see support, so we need to get through that $100,000 level to truly break down. Short-term rallies at this point will have to contend with the crucial $108,000 level, which has previously acted as both support and resistance. If we can get above that, then I think we've got an opportunity to go much higher. Keep in mind that's also where the 200-day EMA sits, so that comes into the picture as well. Anything above there opens up a move to $116,000, but it's going to take a lot for that to happen.

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Ultimately, this market looks more negative than anything else. Best case scenario, we just hang around above $100,000 and work off some of the froth. What's interesting is that the overall online debate right now is that crypto is somehow being manipulated and falling apart, but in reality, it's not that massive of a drop and hasn't been particularly disorderly. I think a lot of people out there are over-leveraged to Bitcoin.

EURUSD Chart by TradingView

Again, a breakdown below the $100,000 level leaves another $8,000 drop, while a break above $108,000 could be a significant turnaround just waiting to happen. Right now, though, there's no real reason to think Bitcoin is going to catch a huge bid. Sideways or lower seems more likely. It's an institutional asset now, and it's worth noting that some larger institutions, BlackRock's name, keep being mentioned are reportedly big sellers. Welcome to Wall Street, crypto traders; this is how it works in a regulated market.

Sideways movement wouldn't be the worst outcome, as it could build confidence, but the days of 15% straight-up moves are probably coming to an end. Institutions don't like assets that volatile. And then again, you have to ask a serious question: what's Bitcoin being used for? It seems to change every year or two, and right now, most people can't even answer that question. The 50-day EMA dropping below the 200-day EMA would kick off the so-called“death cross,” which is important for longer-term traders to watch. We'll just have to see how that plays out.

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