Key Takeaways
- •Bitcoin's decline below $100,000 aligns with a Wyckoff Distribution pattern, suggesting a potential drop towards $86,000.
- •Some analysts maintain a positive outlook, believing the bull market will persist as long as the $94,000 support level holds.
Bitcoin's Recent Price Action
Bitcoin (BTC) has recently fallen below the critical $100,000 support level. This downturn has been influenced by hawkish signals from the Federal Reserve and ongoing selling pressure from large holders, often referred to as "whales."
The current market structure is increasingly indicative of a classic technical breakdown, strengthening the possibility of further selling in the Bitcoin market.
Wyckoff Distribution Model Signals Potential Drop to $86,000
A notable technical analysis pattern, the Wyckoff Distribution, has been highlighted by analyst @follis_ on X. This pattern is frequently observed near market tops and suggests a potential significant price decline for Bitcoin. The current price action of BTC appears to be closely mirroring the five phases of this distribution model.
According to @follis_, the alignment with the Wyckoff Distribution pattern is strong enough to suggest that the Bitcoin bull market "might actually be over."
Bitcoin's surge past $122,000 represented the Buying Climax (BC) phase. This was followed by an Automatic Reaction (AR) and subsequent Secondary Tests (ST) that failed to establish new higher price levels.
The price movement towards $126,200 in early October was characteristic of an Upthrust After Distribution (UTAD), which often signals the exhaustion of buying demand.
Following this, Bitcoin has shown multiple Last Points of Supply (LPSY) and has broken through mid-range support around $110,000, indicating the confirmation of Phase D of the Wyckoff model.
The subsequent drop below the $102,000–$104,000 zone, which represents the Automatic Rally/Sign of Weakness (AR/SOW) area, has moved BTC into Phase E, the markdown phase, leading to an accelerated decline. By Friday, Bitcoin's price had fallen below $95,000 on Binance.
Applying the Wyckoff measured-move technique to the distribution range of $122,000 to $104,000 suggests a potential downside target of $18,000, projecting a primary target of $86,000.
This bearish shift in the market coincides with a general decline in global risk appetite. This sentiment is largely driven by concerns that the Federal Reserve may not proceed with interest rate cuts in December.
The recent US government shutdown, which concluded on Thursday, limited access to crucial economic data. This lack of clarity has made policymakers more hesitant about easing monetary policy, creating uncertainty that has impacted risk assets, including Bitcoin and US stocks.
Persistent Bullish Sentiment Among Some Analysts
Despite the bearish technical signals, some analysts believe that Bitcoin's broader uptrend remains intact. According to Ki Young Ju, CEO of CryptoQuant, the bull market will continue as long as the price stays above the $94,000 level, which represents the average cost basis for holders who have held BTC for six to twelve months.
Hunter Horsley, CEO of Bitwise, has suggested that Bitcoin might have been in a bear market for nearly six months and is approaching its conclusion. He expressed a strong positive outlook for the cryptocurrency market, stating that "the setup for crypto right now has never been stronger."