Bitcoin Analysis: Navigating the Key Levels and Patterns

As the year comes to a close, Bitcoin’s price action presents a mixed narrative, leaning bearish in the near term. Traders and investors are closely monitoring critical levels and chart patterns to anticipate Bitcoin’s next significant move. Below, we analyze the key features shaping the current outlook. 📊🔧🕵️

Key Levels and Patterns on the BTCUSD Daily Chart

BTC down from ATH, 3-day retracement, then down. Support retest at $92,118 likely.
BTC down from ATH, then up, then down. Retest at $92,118?

  1. Donchian Channel Basis at $100,241:

    • The orange price label at $100,241 marks the basis of the Donchian channel on the daily chart. 💡📊🌍

    • On December 26th, Bitcoin’s high approached this level during a retracement from the recent low at $92,118. However, it failed to reach the basis, signaling a bearish hint. This reflects a lack of bullish momentum after the sharp decline from the all-time high of $108,364 on December 17th. 🔴📈🔧

  2. Bitcoin's Next Support to Test at $92,118:

    • The $92,118 level, which marked the low on December 20th, remains a crucial support. 🔲🔷📉

    • While price approached this level on December 23rd, it created a higher low, suggesting some buyer activity. However, the ongoing decline hints that this support will likely be tested again in the near term. ⚖️📉🕌

  3. Bearish Pitchfork Formation:

    • A black pitchfork acts as a downward channel. Though not a classic bear channel due to a lack of two upper touchpoints, the pitchfork effectively frames the price action. 🔻🔳🔄

    • Price retraced not only to the Donchian channel basis but also to retest this pitchfork’s middle line. Such retests are often seen as potential setups for further downside, amplifying bearish pressure. 🔽🔴🌐

  4. EMA20 slanting downwards and at $97,149:

    • The black line represents the 20-day Exponential Moving Average (EMA), currently slanting downward which is bearish. The Bitcoin bulls seeking to reconquer the 100k mark must first overcome the EMA20 daily resistance line!. 📈⬆️⬇️

    • Bitcoin has remained below the EMA20 for three consecutive days, further reinforcing the bearish outlook. The five-day decline in the EMA’s slope underscores weakening momentum in the short term. 🔴🕵️📈

Recent Price Action and Bearish Signals

  • All-Time High Rejection: Bitcoin’s decline from the all-time high of $108,364 (on December 17th) to $92,118 (on December 20th) marked a sharp downward movement, indicating strong selling pressure. 📉🔧🔹

  • Lower High Formation: The failure to reclaim the Donchian channel basis or the EMA20 highlights the absence of significant buying interest. This lower high is a key bearish structure that aligns with broader declining momentum. 🔸🕵️📈

  • 1.95% Decline Today (December 29th): Today’s price action has so far declined by 1.95%, bringing Bitcoin closer to the $92,118 support level. A daily close near or below this level would likely increase bearish sentiment. 🔴📉📊

Potential Scenarios Ahead

  1. Bearish Continuation:

    • If Bitcoin breaches the $92,118 support level, further downside could accelerate. Key levels to monitor below include $88,500 and potentially $86,000, representing significant psychological and structural supports.

  2. Short-Term Consolidation:

    • Bitcoin could consolidate between $92,118 and $97,149 (the EMA20). Such a range-bound movement would signal indecision and allow traders to reassess momentum indicators.

  3. Bullish Reversal (Low Probability):

    • For a bullish case to gain traction, Bitcoin would need to reclaim the EMA20 at $97,149 and close above $100,241 (the Donchian channel basis). This would suggest a stronger retracement or even a reversal towards the previous highs.

So, Bitcoin is Still Within a Bearish Bias...But... And important Support Tests Very Close Ahead

Bitcoin’s inability to sustain a move above the EMA20 and its failure to touch the Donchian channel basis signal ongoing bearish pressure. The key support at $92,118 is under threat, and a breakdown could lead to significant losses in the short term. While a bullish reversal remains a possibility, the current signals suggest traders should prepare for further downside. 🔴📊⬇️

As always, traders should remain cautious and adapt their strategies to market developments. Monitoring volumetric stats, key support levels, and the broader crypto market environment will be critical in navigating Bitcoin’s next moves. ⚖️🔧🕵️ Always trade Bitcoin at your risk only.