Bitcoin is trading near $95,000 after a steady decline that erased recent gains and pushed the crypto king toward a crucial psychological level. 

The market now waits for investors to make the next decisive move, one that could determine whether BTC rebounds or extends its downward trajectory in the coming days.

Bitcoin Faces Bearish Divergence

Bitcoin’s dominance has been falling for weeks, creating a clear bearish divergence with the Stochastic RSI. Dominance now sits at 59.37%, down from 65.71% in June. At the same time, the Stoch RSI recorded a bearish crossover as the D line moved above the K line, signaling a shift in market strength.

This divergence, paired with RSI entering overbought territory earlier, signals weakening bullish momentum. Historically, such conditions often precede price reversals or notable corrections. With dominance slipping and momentum softening, traders face increased uncertainty about Bitcoin’s ability to hold support at current levels.

Bitcoin Dominance. Source: TradingView

Bitcoin’s MVRV Z-Score has dropped to a 14-month low, indicating the asset is undervalued relative to historical norms. This metric evaluates when Bitcoin is trading above or below its fair value. At present, the indicator suggests BTC is firmly in undervalued territory, which has often marked major accumulation phases.

When the MVRV Z-Score hits similar lows, long-term investors typically begin accumulating. This behavior supports price recovery as fresh demand enters the market. If accumulation increases at current levels, Bitcoin could gain the momentum needed to stabilize and reverse its recent downtrend.

Bitcoin MVRV Z-Score. Source: Glassnode

Can Bitcoin Price Make a Reversal?

Bitcoin trades at $95,040, hovering around a crucial psychological level. The decline intensified after BTC broke below a head and shoulders pattern last week. This breakdown has fueled bearish expectations.

The head and shoulders pattern points to a 13.6% decline, placing the target at $89,407. If investors remain bearish, Bitcoin could slip toward $90,000 and eventually reach the projected target. The combination of falling dominance and bearish crossovers strengthens the case for this downside move.

Bitcoin Price Analysis. Source: TradingView

However, if investors step in and accumulate at undervalued levels, Bitcoin could rebound toward $100,000. A successful recovery would invalidate the bearish thesis and result in a reversal, pushing the price closer to $105,000. This move would also invalidate the head and shoulders pattern.