Bitcoin price dropped below the important $90,000 support level as the recent rebound faded and investors embraced a risk-off sentiment. BTC coin has dropped by 30% from its highest point this year. So, what next for Bitcoin as risky patterns form ahead of the BoJ decision?
Bitcoin Price Technical Analysis Suggests a Risky Pattern Has Formed
The daily timeframe chart shows that the Bitcoin price has rebounded from last month’s low of $80,637 to a high of $94,635, where it faced substantial resistance.
Bitcoin price has now moved below the lower boundary of the rising wedge pattern, a common formation comprising two ascending, converging trendlines. A wedge often leads to more downside.
This wedge is part of the bearish flag pattern, which is made up of a long vertical line and an ascending channel.
Additionally, Bitcoin price has remained below the 50-day Exponential Moving Average (EMA) and the Supertrend indicator. It is also attempting to move below the Strong, Pivot, and Reverse points of the Murrey Math Lines tool.
Therefore, these technicals suggest that Bitcoin price has more downside to go and that the Santa Claus rally may not happen after all. If this happens, the next key support level to watch will be at $80,630, its lowest level in November.
A drop below that price will mean that bears have prevailed, a move that will point to more downside, potentially to the ultimate support of the Murrey Math Lines tool at $75,000. This target is crucial as it aligns with the lowest level in April this year when Donald Trump unveiled his reciprocal tariffs.
The bearish BTC price forecast will become invalid if it moves above the Major S&R Pivot Point of the Murrey Math Lines tool at $100,000. Such a move will mean that there are still bulls left around to push it higher, potentially to the all-time high of $126,300.
BTC Price Has Notably Headwinds Ahead
Bitcoin price faces numerous headwinds that could drag on its performance in the coming weeks.
One of the main headwinds is that many companies that rushed to emulate Strategy’s Bitcoin accumulation may start selling their coins in the near term.
In a recent statement, Strategy’s CEO warned that the company may be forced to sell its coins to cover its dividend payments. It later reversed that view, noting that it had over $1.2 billion in cash to handle those transactions.
However, there is a risk that other companies will start to sell, a move that may lead to more selling pressure.
At the same time, there are signs that demand for Bitcoin ETFs has waned in the past few months. These funds shed over $3.48 billion in assets last month, the biggest monthly outflows since February this year.
While Bitcoin ETFs have added $348 million in inflows this month, the inflow strength remains weak.
Most importantly, the Bank of Japan is expected to hike interest rates again this week, a move that always triggers double-digit losses in Bitcoin and other assets.
Bitcoin price may also drop due to ongoing jitters in the stock market, where some of the best blue-chip companies, such as Broadcom, Oracle, and Nvidia, have tumbled and entered a bear market over the past few weeks.
In some instances, a drop in the stock market leads to more downside in other risky assets, such as Bitcoin and other cryptocurrencies.
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