Bitcoin price risks major correction amid bearish signals
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Bitcoin enters Christmas week at a pivotal moment, trading near $95,000 and struggling to maintain support. After a bearish weekly close, technical and macroeconomic factors suggest the possibility of a deeper correction. Analysts warn of a potential $20,000 drop in the coming weeks, though some see opportunities for long-term accumulation.
Bearish Weekly Close Raises Concerns
Bitcoin’s weekly chart confirmed a bearish engulfing pattern, ending a five-week uptrend. This signals a shift toward a multi-week correction, with old support levels at $95,000 turning into potential resistance. Traders are closely watching for a relief rally, though sentiment remains cautious. Some analysts predict a pullback to $80,000 or even the previous all-time high of $74,000 as part of a typical bull market correction.
Despite the short-term bearish outlook, December 26 is historically a high-performing day for the S&P 500, sparking hopes of a potential "Christmas bounce" for risk assets, including Bitcoin.
Macro Factors Add to Bearish Momentum
Bitcoin's recent rally has been dampened by macroeconomic headwinds, including a hawkish Federal Reserve stance. While the Fed cut interest rates by 0.25% last week, it signaled caution on further cuts in 2025, raising concerns about reduced liquidity.
Adding to the pressure, global money supply dropped by $4.1 trillion in the last two months, correlating with Bitcoin’s retreat from its $108,000 all-time high. Analysts warn that the tightening liquidity environment could lead to further downside in BTC prices.
Technical Analysis: Key Levels to Watch
Bitcoin’s immediate support lies at $90,000, with a break below potentially targeting $80,000. On the upside, resistance is stacked around $100,000, with significant liquidity concentrated at $115,000.
Historical trends show that pullbacks of 25–30% are common during bull markets. This cycle’s corrections have been less severe, but a drop to $80,000 would align with prior patterns, reflecting both spot ETF demand and growing institutional interest.
Sentiment and Long-Term Opportunities
Market sentiment has taken a significant hit, with social media commentary showing the highest levels of FUD (fear, uncertainty, doubt) this year. However, contrarian analysts suggest this negativity could precede a rebound.
For long-term investors, Bitcoin’s current price levels present a potential opportunity. The Smart DCA indicator from CryptoQuant has returned to favorable territory, signaling conditions conducive to dollar-cost averaging strategies.
Outlook
Bitcoin faces a challenging period as macro and technical pressures align for a potential correction. Traders should watch for moves below $90,000 or above $100,000 to gauge near-term momentum. While downside risks dominate, long-term holders may see current levels as an entry point for accumulating BTC, particularly if volatility continues to shape the market.
Bearish Weekly Close Raises Concerns
Bitcoin’s weekly chart confirmed a bearish engulfing pattern, ending a five-week uptrend. This signals a shift toward a multi-week correction, with old support levels at $95,000 turning into potential resistance. Traders are closely watching for a relief rally, though sentiment remains cautious. Some analysts predict a pullback to $80,000 or even the previous all-time high of $74,000 as part of a typical bull market correction.
Despite the short-term bearish outlook, December 26 is historically a high-performing day for the S&P 500, sparking hopes of a potential "Christmas bounce" for risk assets, including Bitcoin.
Macro Factors Add to Bearish Momentum
Bitcoin's recent rally has been dampened by macroeconomic headwinds, including a hawkish Federal Reserve stance. While the Fed cut interest rates by 0.25% last week, it signaled caution on further cuts in 2025, raising concerns about reduced liquidity.
Adding to the pressure, global money supply dropped by $4.1 trillion in the last two months, correlating with Bitcoin’s retreat from its $108,000 all-time high. Analysts warn that the tightening liquidity environment could lead to further downside in BTC prices.
Technical Analysis: Key Levels to Watch
Bitcoin’s immediate support lies at $90,000, with a break below potentially targeting $80,000. On the upside, resistance is stacked around $100,000, with significant liquidity concentrated at $115,000.
Historical trends show that pullbacks of 25–30% are common during bull markets. This cycle’s corrections have been less severe, but a drop to $80,000 would align with prior patterns, reflecting both spot ETF demand and growing institutional interest.
Sentiment and Long-Term Opportunities
Market sentiment has taken a significant hit, with social media commentary showing the highest levels of FUD (fear, uncertainty, doubt) this year. However, contrarian analysts suggest this negativity could precede a rebound.
For long-term investors, Bitcoin’s current price levels present a potential opportunity. The Smart DCA indicator from CryptoQuant has returned to favorable territory, signaling conditions conducive to dollar-cost averaging strategies.
Outlook
Bitcoin faces a challenging period as macro and technical pressures align for a potential correction. Traders should watch for moves below $90,000 or above $100,000 to gauge near-term momentum. While downside risks dominate, long-term holders may see current levels as an entry point for accumulating BTC, particularly if volatility continues to shape the market.