Bitcoin’s price struggles to maintain momentum as it hovers near $87,700, marking a flat performance for the day and a decline of over 3% for the week. After bouncing off a low of $80,500, traders had initially felt optimistic that a bottom might have been established. However, emerging signals suggest that this bottom could be tested once again, or even breached.
Two significant bearish indicators present risks for Bitcoin’s current trajectory. The first stems from the Relative Strength Index (RSI), a tool that tracks market momentum. Observations between November 18 and November 24 reveal that while Bitcoin formed a lower high, the RSI registered a higher high—a phenomenon known as hidden bearish divergence. Typically observed during downtrends, this divergence often foreshadows a continuation of the current trajectory rather than a reversal.
The second warning comes from the trend of exponential moving averages (EMAs), which are designed to respond swiftly to recent price movements. A bearish crossover is looming as the 100-day EMA approaches the 200-day EMA. Such crossovers are typically indicative of a weakening trend. The fact that this potential crossover is occurring near the $88,100 resistance heightens its significance. If the crossover confirms while Bitcoin remains below that level, the potential for a recovery diminishes.
On-chain metrics corroborate these bearish signals. Notably, wallets holding between 1,000 to 10,000 BTC have been actively reducing their holdings since November 16, with the number of such wallets dropping from 1,984 to 1,962 by November 25. This pattern mirrors an earlier trend in November when a similar decline in whale wallets was followed by an approximately 8% price drop in Bitcoin. With whale activity indicating a trend toward reduction in positions, the theory that Bitcoin has found a bottom comes under serious scrutiny.
Looking ahead, key price levels are critical for Bitcoin. For any chance to weaken the negative divergence and halt the EMA compression, Bitcoin must achieve a clean daily close above the $88,100 threshold. A decisive move above this level could pave the way toward higher targets like $93,800, and potentially as high as $107,400, though the current bearish indicators make these targets seem less likely in the near future.
Conversely, the $80,500 level serves as a crucial support line. Falling below this level would confirm an 8.32% decline from current prices, similar to the downturn seen earlier this month driven by whale activity. Such a drop might also indicate that the previous low was not a genuine bottom, potentially prolonging Bitcoin’s bottoming process as it navigates through this cycle. While Bitcoin has shown some resilience, the existing bearish indicators are clear and warrant caution among traders.
