Bitcoin Price Dips Below $90,000 – Are We Close to Testing November Lows?

Bitcoin (BTC) is currently revisiting a vital support level after a 5% drop from its recent peak, which has pushed its price under the $90,000 mark. Analysts are suggesting that while the overall structure of the cryptocurrency appears stable, a swift rebound is crucial to avoid revisiting the lows seen in November.

Key Takeaways

Bitcoin's price has dipped below $90,000, currently hovering around the $88,000 support level.
Analysts warn that a quick rebound is essential to avoid retesting November lows.
Two potential scenarios have been outlined: a bounce back or further downward movement.
The overall market structure remains stable, but prices must stabilize above critical support levels for sustained recovery.

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Bitcoin Attempts to Stabilize at $88,000

On Friday, Bitcoin fell from its recently regained $90,000 level, heading towards a significant support area where it has now found stability. Following the November market correction, which saw Bitcoin plunge to a low of $80,600, it has been in an effort to recover.

For the past two weeks, Bitcoin has been trading within a broader re-accumulation range situated between $82,000 and $93,500. It even peaked at a multi-week high of $94,150 earlier this week. However, as December's first week is coming to a close, BTC has once again dropped below the upper area of its local range, landing near the $88,000 support level.

Analyst Ted Pillows has observed that Bitcoin has been having difficulty reclaiming the crucial $94,000 resistance, predicting that if the price continues to fall, it will likely want to move lower before making another attempt at a breakout. He believes a bounce from the support zone around $88,000 to $89,000 is probable.

Altcoin Sherpa agrees with this assessment and stated that the current retest will determine whether the recent price movements represent just lower highs, suggesting a downturn, or if there is potential for a rise towards $100,000. The analyst presented two possible scenarios:

The price may retrace to the $87,000-$89,000 zone and then bounce above the $93,000-$94,000 resistance.
Alternatively, Bitcoin could continue to hover below local resistance before eventually dropping to November's lows or lower. If this occurs, Bitcoin will need to find a bottom quickly to avoid this unfavorable outcome.

Bitcoin's Pullback Patterns

Analyst Rekt Capital pointed out that Bitcoin is still facing rejection from the upper resistance range. However, he reassured investors that as long as this pullback is not as steep as prior ones, there is no need for concern. He mentioned that if the rejections are shallower than the previous two, the resistance will weaken, making it easier for Bitcoin to breach this barrier over time.

Earlier in the week, Rekt emphasized that Bitcoin's consolidation structure remains strong as long as it closes above the range lows this week. He highlighted that the existing Macro Downtrend—which has dictated the resistance during this phase—needs to be broken for significant upward movement.

Currently stabilizing between $88,500 and $89,350, Rekt observed that today’s retracement remains a shallower pullback compared to the last two, maintaining the tendency of the ‘retrace shallowing.’ He pointed out that Bitcoin could still drop to the ascending two-week support trendline or hit the $86,000 level without experiencing a significant correction comparable to the recent 10% drop.

As of this writing, Bitcoin is trading at $89,400, reflecting a 2.9% decline in the daily timeframe.

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