bitcoin

Bitcoin (BTCUSD) continues to be under heavy pressure in the past 4 weeks since the October 06 All Time High (ATH) and finds itself battling to hold the 1W MA50 (blue trend-line) as Support. That trend-line has been basically the Support of this Bull Cycle since March 2023, and acted as the most optimal long-term buy level.
Has the Bull Cycle ended?
However this Bull Cycle may have very well come to an end already as the 1W RSI has been long exhibiting the same kind of bearish pattern (Lower Highs trend-line), while also having completed the 4-year Cycle, that all previous Bull Cycles formed on their respective tops. This is a huge Bearish Divergence formation as it goes against the price's Higher Highs, indicating trend exhaustion.
As you can see that 1 RSI Lower Highs trend-line formed the November 2021, December 2017 and December 2013 Cycle Tops. Even worse, the current Lower Highs trend-line has been going on since the March 11 2024 High. If BTC closes a 1W candle below its 1W MA50, it has greater probabilities to confirm the start of the new Bear Cycle as all previous ones did on such break-out.
If yes, how much can it drop?
Now, it might not be too relevant at this time yet, but as far as how low the Bear Cycle can go to before it bottoms, there are three potential levels of interest where long-term investors can Dollar Cost Average (DCA).
The January 2015 Bear Cycle bottom was formed on the 1W MA200 (orange trend-line). Then the December 2018 Bear Cycle bottom was formed on the 1W MA200 and the 0.382 Fibonacci retracement level from the previous bottom. The last Bear Cycle has its bottom below the 1W MA200 and on the next Fib in line, the 0.5 level. The decline on each Bear Cycle that followed decelerated and was less than the previous (-86.70% to -84.19% to -77.22%).
If the new Bear Cycle has already started then the first level for a potential bottom is again the 0.382 Fib around $58000 where contact may potentially be made with the 1W MA200 as well. If it follows the previous Bear Cycle and bottoms on the 0.5 Fib, it will also be below the 1W MA200 around $45000. If on the other hand it goes a Fib level further, as the last two Cycles did, we are looking at the 0.618 Fib as a potential strong bottom candidate around $35000. That will also be a -70.76% decline from the Top, which will be -7% less than the previous Bear Cycle, which is also the difference that the 2022 Bear Cycle had from the 2018 one.
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Bitcoin (BTC) fell sharply to about $111,000 after the Federal Reserve cut interest rates for the first time since 2023, triggering more than $179 million in liquidations of long positions. This shift occurred as traders reevaluated the Fed’s cautious approach following the policy announcement.
The Fed’s choice to decrease rates by 25 basis points to a new target range of 3.75% to 4.00% initially raised hopes for risk assets. However, Fed Chair Jerome Powell’s remark that the central bank is “not on a preset course” for future cuts dampened that excitement quickly. This comment suggested that although monetary policy is shifting toward easing, the future path remains unclear, adding volatility to the crypto market.
On-chain data shows that the rate cut and Powell’s comments led to a wave of liquidations, mainly affecting highly leveraged long positions. The imbalance was pronounced, with long positions accounting for over 80% of total liquidations. This reflected a market that had heavily favored bullish expectations before the announcement.
The market reaction highlights how sensitive digital assets are to macroeconomic changes. While lower interest rates are usually seen as good for risk assets, mixed signals from the Fed caused a short-term decline as traders adjusted their outlooks.
From a technical standpoint, Bitcoin’s price has entered a consolidation phase, with support near $109,000 and resistance around $117,500, based on Fibonacci retracement levels. A clear break below $109,000 might speed up losses toward the $103,500 area, a crucial recovery level since mid-September. On the other hand, consistent strength above $117,500 could lead to a retest of the $126,000 zone, which is the next major resistance level.
Momentum indicators are neutral. The Relative Strength Index (RSI) shows neither oversold nor overbought conditions, indicating that Bitcoin is consolidating instead of heading into a deeper downtrend. Analysts observe that the price structure still fits a broader accumulation pattern, as long as the $109,000 level holds.
Despite the dip after the FOMC meeting, overall liquidity conditions are starting to improve. The Fed’s decision to end quantitative tightening by December suggests that liquidity may become more favorable in the coming months. Historically, similar shifts have come before longer-lasting recoveries in the crypto market, especially when paired with falling yields and renewed capital inflows.
Looking ahead, Bitcoin's short-term direction will largely depend on macroeconomic sentiment. If new data from the U.S. shows slowing growth or if ETF inflows increase, it might support the case for another upward movement. However, traders are likely to remain cautious until there’s clearer evidence that the Fed's shift will lead to a sustained interest in risk assets.
For now, Bitcoin seems to be trapped in a range between $109,000 and $117,500, waiting for its next major catalyst. Although volatility is still high, the broader structural setup suggests that any stability in liquidity could create opportunities for renewed upward momentum as the year ends.
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