Bitcoin Faces Potential Bearish Trends Below $90K: 5 Key Insights for This Week

Bitcoin Faces Potential Bearish Trends Below $90K: 5 Key Insights for This Week

As Bitcoin starts the last full week before Christmas, its price is struggling to maintain support around the $90,000 mark.

Key Takeaways:

Bitcoin's price is teetering near the $90,000 support level, prompting traders to prepare for possible range-bound trading.
The emergence of a "bear flag" could point towards a bullish outcome for Bitcoin's current price consolidation.
Important U.S. macroeconomic data is about to be released, including CPI and unemployment figures.
Derivative markets indicate a reduction in risk for the medium term following a likely Fed rate cut.
Signs of a market reset are emerging among short-term holders.

Bitcoin's Trading Range: The $95K Focus

In the spot markets, Bitcoin is currently offering limited opportunities, remaining stuck in a narrow range according to data from Cointelegraph Markets Pro and TradingView.

BTC/USD One-Hour Chart

With the Christmas holiday approaching, market participants are eager for clearer signals before committing to a position. "This really looks like a range and it's trading like one," trader CrypNuevo remarked in a recent social media thread discussing Bitcoin's price movement.

He identified $80,000 and $99,000 as the extremes of this new range, predicting that a movement towards either end might occur soon. "There are more liquidations in the upper side around the 1D50EMA ($95.5K), which makes it more likely to hit this zone first," he noted, referencing the 50-day exponential moving average.

BTC/USDT One-Day Chart

Recent data from CoinGlass highlighted the significance of the $95,000 level as a potential short-term price magnet. Following a sweep of bids overnight, exchange order-book liquidity is now likely to challenge shorts. "The amount of liquidity between the $95K and $98K region is shining brighter than the sun," analyst Mark Cullen advised his followers.

Cullen speculates that a major player could artificially drive the price up to fulfill a large sell order.

BTC Liquidation Heatmap

For crypto trader and analyst Michaël van de Poppe, the key short-term level is still $90,000. "If that $90K area breaks, I think we'll see quick moves to $92K-$94K, increasing the chances of reaching $100K," he indicated.

BTC/USDT Four-Hour Chart

However, some forecasts predict Bitcoin prices could decline back to around $50,000.

The Ongoing Bear Flag Discussion

As we approach the end of 2025, Bitcoin traders are closely monitoring a bear flag visible on daily charts. This pattern has led many to believe that the current price movements are merely a relief bounce amidst a broader downtrend. Once this pattern breaks, further declines could follow.

"Let the drop to $76K begin. Bear divergences and price action are proving their worth," trader Roman commented on social media last week.

BTC/USD One-Day Chart

Not everyone agrees with this outlook, though. Trader SuperBro stated on Monday that "this bear flag and the measured move is unlikely to materialize."

BTC/USD One-Day Chart

He referenced Bitcoin's price actions during the period of U.S. trade tariff implementations, where the price fell below $75,000 before rebounding for several months. SuperBro is also observing potential reversals in the monthly chart, expressing doubt about the narrative that Bitcoin is entering a new bear market despite a 30% drop from its all-time highs.

"Many believe this marks the beginning of a painful bearish trend, but the monthly chart suggests a prolonged bull cycle might still be possible," he reflected.

BTC/USD One-Month Chart

Upcoming U.S. Macro Data

A wealth of U.S. macroeconomic data is set to become available in this last full week leading up to Christmas. The unemployment figures will be among the first important metrics to watch, followed by the Consumer Price Index (CPI) due Thursday. Both will contain insights from the recent government shutdown, shedding light on economic trends that traders and policymakers have lacked for months.

"A massive backlog of economic data is coming this week," the trading resource The Kobeissi Letter highlighted.

Key Events This Week:

October Retail Sales data - Tuesday
November Jobs Report - Tuesday
November CPI Inflation data - Thursday
December Philly Fed Manufacturing Index - Thursday
October PCE Inflation data - Friday
November Existing Home Sales data - …

With the Federal Reserve expanding liquidity after concluding its recent phase of quantitative tightening (QT) in November, interest rates are dropping, even as inflation remains above the Fed's 2% target. Analysis suggests that the current conditions could be favorable for risk assets.

"The boost to liquidity is coinciding with solid economic growth and fiscal stimulus set to roll out next year, thanks to provisions included in the 'One Big Beautiful Bill'," noted the trading firm Mosaic Asset Company in its latest newsletter, "The Market Mosaic."

BTC/USD vs. S&P 500 One-Day Chart

Interestingly, cryptocurrency has diverged significantly from stocks and gold over the past month, failing to take advantage of the most recent financial easing by central banks worldwide. During a recent statement at the White House, U.S. President Donald Trump described inflation as being "totally neutralized."

"We may get it a little bit lower — you don’t want it too [low]. You don’t want deflation; deflation is in many ways worse than inflation," he remarked.

Impacts of Fed Decisions on Bitcoin Options Traders

Following the Federal Reserve's recent actions, Bitcoin derivatives markets have started to show significant reactions. Summarizing the situation from last week, on-chain analytics platform Glassnode indicated that traders are largely in a "wait and see" mode.

"After the FOMC meeting, implied volatility has compressed, but downside risks continue to be priced in," an X thread explained.

Bitcoin Option At-The-Money IV

This forecast aligns with decreasing implied volatility (IV) between weekly and six-month time frames. "Lower IV indicates that options are priced for smaller anticipated movements. With the policy catalyst out of the way, the market is reducing uncertainty," Glassnode elaborated.

Despite this, concerns about stability in the Japanese market have led some analysts to caution against the potential return of volatility across risk assets. On Friday, Japan’s central bank is expected to counter the global trend of easing and raise interest rates—a move that has historically had bearish implications for Bitcoin.

Bitcoin vs. Bank of Japan

In the past two years, the Bank of Japan (BoJ) has enacted numerous rate hikes, marking a structural shift after 17 years of ultra-low rates, pushing them to levels not seen since the 2008 financial crisis. Historically, each BoJ rate increase has triggered a market pullback.

Capitulation Among Bitcoin Speculators

Bitcoin speculators are capitulating at an unprecedented rate, reminiscent of patterns last seen in late 2023, which some analysts believe sets the stage for a market resurgence.

Related: Michael Saylor hints at next Bitcoin purchase as BTC falls below $88K

According to analytics firm CryptoQuant, there are two-year lows detected in the ratio of loss-making on-chain transactions between long-term (LTH) and short-term (STH) holders.

This metric, which is based on the spent output profit ratio (SOPR), reveals how coins being transferred on-chain are either in profit or loss. When on-chain losses are primarily attributable to short-term holders compared to long-term holders, it suggests a flushing out of speculative behavior.

Recently, the SOPR Ratio dipped to 1.29, a low not recorded since the BTC/USD market started rising in Q3 of 2023 when Bitcoin was trading around $30,000. "This sharp decline indicates that short-term holders (STH) are realizing substantial losses in relation to long-term holders (LTH), who are largely maintaining their positions and spending minimal profits or even incurring losses," observed CryptoQuant contributor NovAnalytica.

Bitcoin SOPR Ratio

Last week, Cointelegraph discussed the ongoing challenges faced by STH holders as their cost basis becomes a focal point.

Through this exploration of current market conditions, trends, and upcoming events, Bitcoin enthusiasts can better navigate the complexities of the cryptocurrency landscape leading into the holiday season.