Bitcoin's 9% Surge Faces Bearish Resistance: Why Surpassing $88,000 is Crucial Now

As Bitcoin's price rises roughly 2% today, it has gained close to 9.4% from this week's low of around $80,400. This upward movement appears robust and was anticipated due to a previously successful technical signal. However, a significant risk is emerging at a crucial level, which could determine whether this rally continues or stumbles at the next resistance.

Key Takeaways

Bitcoin has seen a rebound of approximately 9.4% from recent lows.
Current bullish momentum faces resistance from a bearish exponential moving average (EMA) crossover.
A key price level to watch is around $88,200; surpassing this could lead to further gains.
Significant selling pressure exists above $87,671 to $88,082, where many holders are positioned to sell.
Strong support is present between $84,449 and $84,845, necessary to prevent a decline back to the $80,000 range.

Analyzing the Recent Bitcoin Bounce

The initial indication of this bounce came from momentum indicators. From April 8 to November 22, Bitcoin’s price formed a higher low while the Relative Strength Index (RSI) created a lower low. The RSI is a tool used to gauge whether market momentum is increasing or decreasing by comparing recent gains against losses. This occurrence is known as hidden bullish divergence, suggesting that sellers are losing strength even when the price chart may appear weak.

A similar pattern appeared between April 8 and October 26, resulting in an 8.53% rebound. Currently, Bitcoin has already surged 9.38%, indicating this technical signal has played out again.

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The Challenges Ahead for Bitcoin’s Rebound

However, the current rebound now faces significant hurdles. A bearish exponential moving average (EMA) crossover is developing, which occurs when the 100-day EMA approaches crossing below the 200-day EMA. Traders interpret this as a bearish signal, often foreseeing continued downward pressure for an extended period.

Moreover, a substantial supply wall looms above Bitcoin’s current price. Positioned between $87,671 and $88,082, this zone contains nearly 55,567 BTC, valued at around $4.83 billion, representing a bottleneck where many holders are waiting to sell at breakeven. Historically, price rebounds tend to slow down when they reach such supply zones, indicating the current bounce, while promising, is facing its critical test.

Key Price Levels for Bitcoin’s Continuation or Reversal

The crucial area around $88,000 will determine the future direction of Bitcoin's price. The cryptocurrency needs to surpass $88,200 to convert this rebound into a more sustained upward trend, which coincides with both the supply zone and the 0.5 Fibonacci retracement level from the previous drop.

A definitive daily close above this threshold could pave the way toward $92,600. If buyer interest remains strong, the next target would be approximately $95,900, which aligns with the prior point of a significant price meltdown.

Bitcoin's upward momentum can only truly materialize if two conditions are met simultaneously: First, the EMA crossover must complete, which typically restricts rebounds and can pull prices lower. On the downside, the robust support band between $84,449 and $84,845 is substantial, holding almost $35.38 billion worth of BTC.

This support zone, represented visually on the price chart as sitting around $84,100, became a protective floor for Bitcoin after previously breaking above it. Keeping above this support area is vital; a drop below it could trigger a retreat towards the $80,000 mark, posing a risk to the current rebound scenario.