Despite reaching a new all-time high of $108,230 during the same negative period, Bitcoin (BTC) had its worst week since Donald Trump’s victory in the US presidential election in November, falling by more than 8.50%. The Bitcoin/US Dollar price chart is updated daily. TradingViewThe aggressive interest rate estimate for 2025 announced by the Federal Reserve on December 18 was a significant factor in the downturn. Interest rates in the United States were cut by 25 basis points (bps) to a new range of 4.25-4.50%, as anticipated by the central bank. The Fed announced a 100 basis points (bps) reduction in September, but the revised SEP report suggests only 50 bps for 2025.
Bitcoin’s Bearish Outlook Amid Economic Reports
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Raw Spread Accounts offer spreads appetite was strengthened, and Bitcoin recovered slightly due to the Personal Consumption Expenditures (PCE) report on December 20th, colder than expected, and relatively dovish remarks from Fed President Austan Goolsbee. Fundamental, technical, and on-chain indications point to a Bitcoin Faces Bearish continuation in the Bitcoin market next week, and the rebound has also paused this week. Below, we will analyze these predictions.
Bitcoin Faces Bearish Divergence Testing $89,000 Support
Technical indicators indicate that a retest of $89,000 is likely to occur in the next sessions, The following behaviour adds to the possibifollowing the IPOs of right now, Currently for about $93,640, down from their recent peak it is currently selling. The Relative Strength Index (RSI) has produced lower highs despite Bitcoin’s price achieving higher peaks, indicating Bitcoin Faces Bearish divergence, which occurs at the same simultaneous increase. The pattern typically indicates that shows wan shows typically show.
This is a three-day price graph for Bitcoin/US dollars. According to the regulation, a crucial support zone at $89,000 is located at the 0.236 level. Possible places for a price rebound if the $89,000 support fails are $76,930 (0.382 Fibonacci level) and $67,100 (0.5 Fibonacci level). The 50-3D exponential moving average (the red wave) is in line with the alignsaligns support objective.
Bitcoin Faces Drop as Global M2 Money Supply Declines
Crypto traders may be more hesitant to take risks in the next weeks due to the strong lag between Bitcoin and the following money supply. The Kobeissi Letter, a trading resource, reveals in the figure below that Bitcoin prices usually lag behind global M2 money supply changes by about ten weeks. There seems to be a correlation between the two events, as Bitcoin hit a record high of $108,000 in October, and the M2 money supply reached an r record high of a trillion.
This article discusses the impact of Bitcoin on the global M2 supply. Written by Kobeissi, global M2 has dropped $4.1 trillion, reaching $104.4 trillion—the lowest level since August 2024—since then. Data indicates that Bitcoin’s value could drop by as much as $20,000 in the next weekfollowingfollowingggesting that the cryptocurrency could be ready for a major correction if it continues.
Bitcoin’s Key Support and Resistance Levels
The realized price of short-term holders (STH) serves as a significant support level, and the present price action of Bitcoin is moving close to this level, indicating potential zones of strong buying interest. In times of market weakness, these levels— by averaging the purchase prices of short-term investors—are frequently accurate reflections of investor pessimism.
The first important level is the 1-week to 1-month STH realized price, which is significantly above the current trading price at $98,705el. This level might serve as short-term resistance if Bitcoin comes back, but it won’t hold much if the price drops.
The support and resistance of Bitcoin. Blockchain TTechnologTechnology,792 range of one to three months STmonthszed price provides a more substantial support zone. THowever, tHowever, the3–6-month STH realized price of $60,501, provides the most support. In the case of extended negative momentum or unforeseen market shocks, this level could serve as the most robust safety net, reflecting the massive accumulation by investors early in the year.
FAQs
What are Bitcoin’s key support levels?
Bitcoin's key support levels include $89,000, $76,930, and $67,100. These levels are critical in determining whether Bitcoin can maintain its value or face further price drops.
How does the M2 money supply impact Bitcoin's price?
Bitcoin typically lags behind global M2 money supply changes by about ten weeks. With the recent drop in M2 supply, Bitcoin's price is expected to experience a significant correction, potentially dropping by as much as $20,000.
A bearish divergence occurs when the price
A bearish divergence occurs when the price of Bitcoin reaches higher peaks while the RSI shows lower highs. This indicates that the upward momentum may weaken, signalling a potential price drop.
Should Bitcoin investors be concerned about further declines?
Bitcoin investors should be cautious as technical and fundamental indicators point to continued bearish pressure. However, support levels such as the 3–6-month realized price could provide protection if the market weakens.
