Introduction
The Bitcoin (BTC) price has taken a significant hit over the last four days, plummeting by more than 11% from its all-time high of above $108,360 on December 17. This decline has sparked questions about whether this level is the local top for BTC and how low it can go in the next few days.
A Local Top or Just a Correction?
The recent drop has led to concerns that the current price action may be indicative of a local top. However, some analysts suggest that Bitcoin could still rebound towards its resistance level at $102,000. If history repeats itself, BTC may initially dip towards $88,000 in December, only to bounce back up towards the resistance and beyond.
December 2023 vs. December 2024 Market Trend
A closer look at the market trend reveals a similar price action pattern between December 2023 and December 2024. In December 2023, Bitcoin consolidated within a rectangular range of $39,000-$46,000 before breaking out and rallying to $66,000 in March 2024.
**Consolidation Pattern**
* **Range**: $39,000 - $46,000 (December 2023)
* **Breakout**: $66,000 (March 2024)
**Current Price Action**
* **Range**: $88,000 - $102,000 (current price action)
The current pattern suggests that Bitcoin is consolidating between $88,000 and $102,000. As of December 20, BTC’s price may be undergoing a correction towards the channel’s lower boundary zone defined by the $88,000-$90,000 range.
A 30% Crash in November ’21?
However, a Bitcoin fractal on a weekly timeframe indicates that a broader price correction could be in play. The current price action exhibits signs of bearish divergence, reminiscent of its 2021 market top.
**Bullish Momentum**
* **Relative Strength Index (RSI)**: forming lower highs despite BTC/USD reaching higher highs
The RSI’s behavior is indicative of weakening bullish momentum and a potential price correction ahead. This divergence preceded a significant drop from Bitcoin’s then-all-time high near $69,000 in 2021, with the price eventually bottoming at around $15,000 in late 2022.
**Potential Price Correction**
* **Previous Market Top**: $69,000 (2021)
* **Price Bottom**: $15,000 (late 2022)
**Current Price Action**
* **Bearish Divergence**
On longer time frames, the key support to watch lies at the 50-week EMA, which will be around $66,600 by January 2025. If that fails to hold, the next support is at $57,000, which is the 0.786 Fibonacci retracement level.
Local Bottom Around $97K?
If Bitcoin successfully breaks out from the ascending triangle support near $97,000 visible in the chart, it could mean that the cryptocurrency is already bottoming out. The triangle’s horizontal resistance near $102,000 and ascending trendline support around $97,000 indicate buyers are maintaining higher lows, a sign of underlying strength.
**Triangle Support**
* **Breakout Level**: $97,000
If BTC bounces from this support, it could set the stage for a breakout above $102,000. A confirmed breakout from the triangle projects an upside target near $114,650, measured by adding the triangle’s height (~$12,000) to the breakout level.
**Breakout Target**
* **Upside Target**: $114,650
**Bearish Divergence Narrative**
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However, failure to hold support would reinforce the bearish divergences and open the door for a deeper correction below $90,000 toward the aforementioned levels.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
**Conclusion**
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The recent drop in Bitcoin's price has sparked questions about whether this level is the local top for BTC and how low it can go in the next few days. However, some analysts suggest that Bitcoin could still rebound towards its resistance level at $102,000. If history repeats itself, BTC may initially dip towards $88,000 in December, only to bounce back up towards the resistance and beyond.
The market trend suggests a similar price action pattern between December 2023 and December 2024. The current pattern indicates that Bitcoin is consolidating between $88,000 and $102,000. As of December 20, BTC's price may be undergoing a correction towards the channel's lower boundary zone defined by the $88,000-$90,000 range.
However, a Bitcoin fractal on a weekly timeframe suggests that a broader price correction could be in play. The current price action exhibits signs of bearish divergence, reminiscent of its 2021 market top. On longer time frames, the key support to watch lies at the 50-week EMA, which will be around $66,600 by January 2025.
If Bitcoin successfully breaks out from the ascending triangle support near $97,000 visible in the chart, it could mean that the cryptocurrency is already bottoming out. The triangle's horizontal resistance near $102,000 and ascending trendline support around $97,000 indicate buyers are maintaining higher lows, a sign of underlying strength.
In conclusion, the current price action suggests that Bitcoin may be undergoing a correction towards its resistance level at $102,000. However, failure to hold support could reinforce the bearish divergences and open the door for a deeper correction below $90,000 toward the aforementioned levels.
