What You Need to Know:
- Bitcoin (BTC) has dropped nearly 10% from its all-time high.
- The recent decline has triggered a significant indicator that often signifies the end of a price drop.
Bitcoin (BTC) recently fell to $96,000 following a decision from the Federal Reserve (Fed) to lower the benchmark borrowing rate, which was anticipated. However, the Fed adjusted its forecast to two rate cuts for 2025, down from four projected earlier. Furthermore, the Fed clarified its stance against potentially participating in government plans to maintain a BTC reserve.
Since the Fed’s announcement, BTC has seen a drop exceeding 8%, with prices momentarily hitting lows around $96,000. Current trading indicates BTC is hovering near $97,500, reflecting a nearly 10% decrease from its record high of $108,266 achieved earlier this week, as reported by CoinDesk.
This price shift has led to the 50-hour simple moving average (SMA) dropping beneath the 200-hour SMA, indicating a bearish crossover, which historically suggests a more substantial downturn is possible. However, similar patterns in the recent bull market have not performed as expected during pullbacks.
As BTC navigates its post-u.s. election surge from $70,000 to over $100,000, past pullbacks have consistently ended with a bearish crossover between those SMAs.
The recent crossover offers some hope to bullish investors anticipating a return above the six-figure mark.
A bounce-back for Bitcoin could encounter resistance around $10,600, dictated by a descending trendline aligned with the current price drop. Overcoming this threshold could see Bitcoin reaching new record highs.
Still, it’s prudent to note that patterns do not always unfold as anticipated, and the referenced contrary indicator may fail, leading to deeper declines. Any dip below $96,000 could expose lower swing lows, possibly around $91,000 from early December.
