Bitcoin Hits $108K Milestone, Faces Post-Fed Turmoil
Key Level at $100K Broken. RSI Divergence Signals Caution and Deeper Corrections
Bitcoin broke levels that were unimaginable just 5 years ago and added more than 150% just this year alone. The first “mind-blowing” event – if we can call it that – occurred in late 2017, when the apex cryptocurrency hit $20K but from there, it went almost straight down and reached $3K in 2019. Most people seemed to put a gravestone on it, saying the bubble had burst and “Bitcoin is dead”.
And then again, Bitcoin climbed back out of the $3K grave and this week it just printed a new All-Time High at $108,360. Some pundits predict it to go over $200K by March 2025, buoyed by institutional adoption, Bitcoin ETFs, possible help from Trump policies, and retail FOMO. Now, while the given timeframe may be a bit short, let’s not discount such a price tag because, remember: when it was $3K, almost nobody believed it could smash through $100K.
But it may be time for a correction. In fact, Wednesday, December 18 was a day of market panic triggered mostly by the Fed’s 25 bps rate cut and the hawkish stance adopted by Fed Chair Powell. The US Dollar strengthened and U.S. stocks fell. Bitcoin went from an open at $106,200 to a close at $100,150, which was the biggest daily open/close difference in a very long while.
The drop seen Wednesday could trigger an extended period when investors are reluctant to buy in, waiting for lower prices. It’s also possible that the end of the year will bring a lower risk appetite and a feeling of content with the pocketed profits. That being said, let’s take a look at the possible levels where the correction may end.
Chart Analysis – BTC/USD
The first All-time High (ATH) was printed on November 6 and after that, we had significant peaks on November 13, November 24, December 5, and December 17. The last 3 ATHs have been printed with a corresponding bearish divergence on the Relative Strength Index. While Bitcoin was printing higher highs, the RSI was making lower highs.
Bearish divergence is a strong indicator that the price will go down, however, it is not a signal to sell. In other words, it indicates that the price of an asset will go down but the move may take some time to materialize. But taking into account Bitcoin’s massive climb, the overbought RSI, and the prolonged bearish divergence, it may be time for a deeper correction.
Support is now located at $95,000, which was a previous low, followed by every 000 level. A stronger support lies at $90K ($90,700, which was a significant low). Resistance is located at $99,800 – 100K, followed by the current All-Time High and by $110,000.
