Bitcoin has opened December with a downward trend, currently trading under pressure after failing to maintain above $93,000. At present, the cryptocurrency is around $86,800, reflecting a slight decline over the past 24 hours and nearly a 2% drop in the last week. This recent downturn brings the market close to what analysts are identifying as a significant support zone.

However, as of yesterday, this crucial support level was tested.

Analysts Eye the $83K to $81K Region

Michaël van de Poppe, a noted cryptocurrency analyst, indicated that Bitcoin is approaching a critical area where buying might occur. He tweeted,

“Let’s see how prices are going to react when Bitcoin tests beneath that low at $83.4K.”

(Translation: Let’s observe how Bitcoin reacts when it tests below $83.4K.)

He further remarked that should this level fail, the market could trend downwards toward $81K to seek support.

Bitcoin recently struggled to overcome the $91,800 mark, which served as a significant resistance level. Following this setback, the price experienced a sharp decline accompanied by heightened trading volume. The overall downtrend persists, characterized by lower highs and lower lows visible on the daily chart.

Bitcoin Price Chart

Furthermore, Van de Poppe stated that the ongoing price actions within the gap of $80K and $90K are not conducive for short-term trades. He noted that a definitive breakout above $90K would signal strength.

“Failing to sweep the low and find enough buyers… would be another indication that we’re going to see lower valuations.”

(Translation: If there aren’t enough buyers and the lows aren’t lifted, it will suggest further decreases.)

Analyst Daan Crypto Trades also commented on the recent dip, identifying it as a higher low at a significant support level, stating,

“Wouldn’t want to see price go any lower than that.”

(Translation: I wouldn’t like to see the price drop below that level.)

He warned that another downturn could direct the market back towards $80K, elaborating that price movements in early months often reverse.

Increased Caution from Long-Term Patterns

Veteran trader Peter Brandt shared a chart illustrating five previous Bitcoin bull cycles, each concluding with a parabolic trend breakdown followed by a correction of at least 75%. He cautioned that this trend has been consistent throughout history.

“You better have a great reason to bet against this pattern.”

(Translation: You need a good reason to go against this pattern.)

Currently, Bitcoin trades below a parabolic trendline indicated on Brandt’s chart, with an ADX value near 22, suggesting weak trend momentum. High volatility suggests potential for further price fluctuations.

Buying Activity at Current Levels

Despite broader worries, new data shows a dense cost basis cluster around the low-$80,000 mark, indicating that many Bitcoin holders recently purchased at these levels, which may foster buying interest and act as short-term support.

Tom Lee of Fundstrat has mentioned that he anticipates Bitcoin reaching a new all-time high in the near future. Until then, traders are vigilantly observing the $83K mark to determine if the market can hold firm or if additional declines are imminent.