BTC Price Dips After $100,000 Close: Analysts Warn of Possible Downside
BTC Price– Bitcoin (BTC) made headlines with its first-ever weekly close above the $100,000 mark, but the euphoria was short-lived as the cryptocurrency faces increased volatility and resistance. Despite hitting a new milestone, Bitcoin’s price has already dipped below $99,000, and market analysts warn that the downside risk could lead to further corrections before the next potential rally.
Bitcoin’s Volatile Start to the Week
Bitcoin’s historic surge above $100,000 on Dec. 8 was met with an immediate pullback, dropping 2.8% as of the latest data from Cointelegraph Markets Pro and TradingView. According to trader Skew, Bitcoin was “still unable to sustain above $101K,” indicating that resistance at those levels remains a major obstacle for further price discovery.
Skew added, “Looking for strength & demand from here to lift the market higher / confirm $98K area as support. Else continued weakness means sit on hands for a bit.” This reflects a cautious market sentiment, with traders expecting some consolidation before a potential upward move.
Bitcoin’s Short-Term Price Action: Filling the $10,000 Wick
A key concern for traders is the unfilled $10,000 downside wick from last week, with market analysts suggesting that this imbalance must be addressed before Bitcoin can continue its upward momentum. Trader CrypNuevo explained that the $92,000 level, which was touched during a liquidation cascade on Dec. 5, might need to be revisited to fill the “imbalance” created by the massive candle wick.
CrypNuevo highlighted a 96% probability that the wick would be filled, noting that, “there is a major imbalance to the downside that needs to get filled sooner rather than later.” This implies that, while a breakout is possible, it would not be sustainable without addressing the price imbalance first.
CPI Week and the Fed’s Impact on Bitcoin
As Bitcoin faces short-term volatility, broader macroeconomic factors are also playing a significant role in shaping the market. This week marks the release of the November Consumer Price Index (CPI) data, which could influence the Federal Reserve’s decision on interest rates.
Markets are increasingly expecting a 0.25% rate cut following the Fed’s Dec. 18 meeting, with an 85% probability of such an outcome, according to CME Group’s FedWatch Tool. As inflation and unemployment continue to rise, traders are focusing on the possibility of “stagflation” — a combination of rising inflation and stagnant economic growth. “All eyes are on CPI and PPI inflation data as markets hope to solidify another 25 bps rate cut,” summarized trading resource The Kobeissi Letter.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
Leave a comment