Bitcoin (BTC) at the Cliff Edge: Will It Plunge Over?

Locked-up funds from the U.S. government shut-down, an AI boom that is faltering, and the Fed saying it probably won’t cut rates in December, are among some of the reasons for Bitcoin being pushed to the cliff edge. Will it go over, or is there still hope in the TA charts for a rebound?

While the charts are suggesting that a strong bounce from Bitcoin could take place from here, the negative economic factors weighing on the global economy are telling a different story. With recession odds climbing, arguably due to the yield curve inversion and tariffs, how can Bitcoin buck this trend?

Bitcoin on the edge

Source: TradingView

This is what Bitcoin on the edge looks like. If the major trendline fails, a descent to $91,000 is probably next. That said, from a technical analysis perspective, this is a perfect place for a rebound. The major trendline stretches back over 15 months and this would be the fourth touchpoint, which would serve to validate the trendline and make it even more robust as support.

If the bulls are able to save the day here, the ensuing bounce would need to take out the above resistances, with $107,000 being the key resistance level that could lead $BTC back to the all-time high if it is surpassed.

More than $1 billion liquidated in a few hours

Another factor to consider is that more than $1 billion in value has been liquidated over the last 24 hours. This is one of the biggest wipeouts this year, but at the same time whales (aka the smart money) are buying the dip. According to CryptoQuant, more than 4,000 BTC were accumulated by whales in just a few hours this morning as the price dipped below $98,000.

One last chance at $91,000?

Source: TradingView

There is no beating around the bush on the daily chart. The stark facts speak for themselves. If the $BTC price falls through the major trendline there is potentially one last chance for the bulls at $91,000. There are no more chances and no more lines in the sand after this – it would be an entry into a bear market, pure and simple. 

Even in such a situation, if the bear market scenario were to play out, all bear markets so far have seen the price come down to retest the tops of all previous bull markets. If this is to be the case here, from $90,000 it would only be another $21,000 (23%) drop to get to the 2021 top at $69,000, a total retracement of 43% from the all-time high. In comparison, the 2021/2022 top to bottom retracement was 77%. Perhaps this would be a sign of much shallower bull and bear markets to come.

A perfect bullish scenario could still be the result

Source: TradingView

The weekly chart also spells out the clarity of the situation right now. It can be seen that there is the possibility of what would probably have to be a candle wick coming down to $91,000. However, given how this trendline has been tested so far, it would be more likely perhaps for the price to rise back up and finish above $100,000 by the end of the week. This would be the perfect bullish scenario.

At the bottom of the chart is the key element. This shows the Stochastic RSI indicators just about hitting the bottom. The same thing happened in April this year, and the subsequent price rise back then was 66%. The same price rise from the current price level would take $BTC to $160,000.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.