Bitcoin standing on thin ice sheet
Bitcoin Sits on Fragile Support – What Happens Next?
In Brief
- • Bitcoin is hovering near the critical $90,000 support level, which it must hold to avoid a deeper decline.
- • Failure to reclaim the $91,800 zone could open the door to a potential drop toward $80,000.
- • The recent rate cut failed to spark a rally, leaving the market waiting to see what happens next.
Bitcoin jumped to $94,000 a few days ago, and then retraced to lower levels and is currently trading at $90,215. Analysts say this is a delicate support that the asset must hold to continue with an upward move or a worse situation could come into play.
Despite the surge to $94,000, the coin has struggled to reach $95,000 and retraced following the rate cut on 10 December. Analyst Crypto VIP Signal says the coin must hold the $90,000 fort for the price to start making its way upward.
Can Bitcoin hold $90,000 Long Enough?
Bitcoin has made several attempts at breaking upward to mark a trend reversal but has failed. The recent sprint to $94,000 was short-lived, thanks to retail FOMO. As is the custom, retailers who have been on the sidelines suddenly jumped in to buy on Bitcoin’s way to the top, which naturally causes a pullback.
With the price now at $90,000, the momentum has to be strong enough to hold it there and also start pushing its way up, but there’s a catch. Another analyst Michaël van de Poppe said Bitcoin lost the $91,800 level after the Federal Open Markets committee (FOMC) meeting yesterday 10 December.
Despite the coin still recording higher lows as a sign of upward trending markets on the lower timeframes, Poppe believes it could still lose the low at $89.5K which will trigger more downside to potentially form a double-bottom test at $80K. Many analysts have predicted a correction to this $80K bottom before any sustained reversal happens.
However if Bitcoin manages to climb back up and reclaim the $91,800 price, higher price exploration can come into play but not before. Failure to reclaim will make room for the dreaded drop to $80,000 level.
Rate Cut Fails to Push Bitcoin Rally
The crypto space had looked forward to the rate cut yesterday, hoping it would be the final catalyst to kickstart a Bitcoin rally and by extension affect the whole crypto market. Contrary to the expectation, the FOMC meeting led to a retrace for Bitcoin, putting the price on a critical price level.
All hope is not lost though, as previous rate cuts were immediately followed by corrections and rallies only followed later. It remains to be seen what happens in the coming days and weeks, whether Bitcoin will break out or the downtrend will continue.
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