Bitcoin Tumbles Below $90K. More Pain Ahead?
RSI Enters Oversold. Is It Enough to Spark a Rally?
Just a month and a half ago, Bitcoin was printing its All-Time High (ATH) above $126K, and this today it is trading at $86K, entering what many are calling a bear market. This tumble was more than just profit taking after a historic high; it was a confluence of multiple factors, starting with Trump’s 100% tariff threat on Chinese goods.
October 10 was the initial spark, when the trade war between the U.S. and China was reignited and Bitcoin dropped from $121,700 to $109,700. Things have cooled down since then, with a trade truce between the two parties. But the effects still lingered on, and Bitcoin continued to slide, with a few other things adding to the drop.
Diminishing Odds of December Rate Cut Weigh on Crypto Markets
According to the CME FedWatch tool, one month ago, the odds of a December Fed rate were standing at 98%. One week ago, the odds were 50%. At the time of writing, the probability is only 27%. Also, the Fed Meeting Minutes released on Wednesday hinted at a pause in rate cuts, adding to the overall negative sentiment. This decreases risk appetite and is detrimental to crypto assets and spot crypto ETFs.
ETF Flows Go Deeper in the Red
Since November 12, spot Bitcoin ETFs saw billions of dollars pouring out, with a record of $866 million on November 13 and $492 million on the 14th. The only green day thus far was Thursday, November 19, with $75 million in inflows. BlackRock’s IBIT fund was the main attraction, with $60 million of positive flows.
A Mixed and Delayed NFP
The September NFP report released Thursday showed that 119K jobs were added, which is more than the anticipated 53K. However, the Unemployment Rate ticked higher, and the Average Hourly Earnings dropped to 0.2% from the previous 0.3%.
There are concerns about the accuracy of the report, given the government shutdown, which, combined with the fact that the October NFP will not be released, still leaves the Fed in semi-darkness. The November NFP will come out on December 16, after the Fed rate meeting.
Chart Analysis – BTC/USD
It’s been all downhill after the break of the key support at $100K and now Bitcoin is testing another important support zone, at $88K. For a break to be considered valid, a daily candle with volume should close below the level. If this happens, it could extend the losses and send BTC into the $80K – $77K area.
Although things are looking grim right now, the RSI is entering oversold territory on the daily chart, which may offer some relief to buyers and trigger profit-taking for the leveraged sellers. The oversold RSI is not a strong signal to buy, just a heads up that the downtrend is becoming exhausted after a long period of bearish movement. The first resistance has now become $90K but the more important level is $100K.
