Bitcoin Price Shows Inverse Cup and Handle Pattern Amidst $160M Liquidations

Summary:
Bitcoin's price is undergoing significant fluctuations, forming a bearish inverse cup and handle pattern amid considerable liquidation events that are unsettling potential buyers. This trend reflects a broader uncertainty in the crypto market, which is influenced by institutional demand and external economic factors.

Key Takeaways:

Bitcoin has formed a bearish inverse cup and handle pattern as liquidation events rise.
The price fluctuated between $82,000 to $95,000 but currently sits significantly below its all-time high.
In the last 24 hours, the crypto market experienced over $540 million in liquidations, with Bitcoin accounting for around $160 million.
Institutional demand for Bitcoin has decreased, affecting overall investor confidence.
A recent cautious stance from the Fed regarding rate cuts is contributing to market uncertainty.

Bitcoin price forms inverse cup and handle pattern as $160M in liquidations spook bulls.

Current Bitcoin Price Analysis

Bitcoin has been subject to considerable volatility over the past month, leading to the emergence of a bearish inverse cup and handle pattern. This development coincides with rising liquidation spikes that have sidelined buyers.

According to data from crypto.news, Bitcoin's price increased from $86,000 to reach an intraday peak of $90,165 on Wednesday, before ultimately stabilizing at $86,612 at the time of this article. Currently, Bitcoin is trading in a range of $82,000 to $95,000, and it remains about 31.3% lower than its all-time high reached in October of this year.

The crypto market has experienced substantial pressure due to large-scale liquidation events, which have diminished investor interest. Derivative traders have been especially cautious since the $19 billion in liquidations observed on October 10, caused by a sudden rise in U.S.–China tariffs. This announcement triggered forced sell orders that cascaded, leading to a series of liquidations.

Data from Coinglass indicates that over the past 24 hours, the crypto market recorded more than $540 million in liquidations, with Bitcoin representing roughly $160 million of this total.

Investors' confidence in Bitcoin has also decreased as institutional demand has been tapering off in recent weeks. Data from SoSoValue reveals that U.S. Bitcoin ETFs have encountered just $21.36 million in net inflows in December, a dramatic decline from nearly $3.5 billion in outflows in November. This trend starkly contrasts the previous two months, where net inflows were nearly $3.5 billion each.

A recent development contributing to the bearish sentiment came from the Fed’s cautious stance on rate cuts during their announcement on December 10, where the Fed Chair suggested fewer rate cuts in the future, notably moving into 2026. Cryptocurrencies, including Bitcoin, often struggle to maintain momentum when the Fed delays rate cuts.

In addition, declines in stocks tied to artificial intelligence, including Nvidia and Broadcom, have further depressed the Nasdaq, contributing to a risk-off sentiment affecting riskier assets.

Market Sentiment Analysis

At the time of writing, the Crypto Fear and Greed Index indicates an ongoing "Extreme Fear" sentiment permeating the broader crypto market.

On the daily chart, Bitcoin has been forming an inverse cup and handle pattern since mid-April. This structure was created as the asset’s price rose, subsequently declined in a rounded shape, and experienced a temporary bounce that failed to regain previous highs. This pattern is typically indicative of a bearish continuation, suggesting a potential decline if the price breaks below the neckline of the formation.

Bitcoin price has formed an inverse cup and handle pattern on the daily chart.

Currently, Bitcoin is trading below all major moving averages, with the shorter-term averages positioned under the longer-term ones, highlighting a growing bearish momentum within the market. Additionally, the Aroon indicator reports an Aroon Down at 78.5%, while the Aroon Up stands at 35.7%, indicating that the bears are presently dominating the trend.

As it stands, Bitcoin's price risks falling to its April low of $76,400, which would be an 11.7% drop from the current price. Nevertheless, a significant breakout above the resistance zone of $94,000-$95,000 in the near term could shift this bearish outlook and potentially signal the beginning of a renewed bullish phase.