Bitcoin (BTC) has extended its November decline, falling to $90,000 and reaching the lower boundary of a significant falling-wedge formation that has encapsulated its entire downtrend from the all-time high of $126,000. This movement, representing a 1.7% intraday drop, places BTC at its most crucial technical juncture since mid-year.
Despite robust institutional inflows earlier in the quarter, the market is now exhibiting signs of exhaustion, with price, momentum, and volume converging in a high-risk zone around the $90,000–$91,000 level. At the time of this report, BTC was trading at $90,931.48.
BTC's Position Within the Falling Wedge
Bitcoin has been trading within a descending wedge pattern since its peak near $126,000. The cryptocurrency has previously bounced from the lower support line of this wedge multiple times, with each rebound driven by bullish defense at the wedge's base. Currently, BTC is touching this support line again at the $91,000 mark.
A falling wedge is a recognized technical chart pattern characterized by price movements between two downward-sloping trendlines that gradually converge. This pattern often signals bearish exhaustion and can lay the groundwork for a future breakout, provided the lower trendline holds firm as support.
Bitcoin continues to trade below its key Simple Moving Averages (SMAs), including the 20-day, 50-day, 100-day, and 200-day SMAs. These averages are used to indicate the direction of price trends across different timeframes, and trading below all of them suggests a broad bearish market structure.
All the aforementioned SMAs are currently sloping downwards, reinforcing the persistent selling pressure observed in the market.
The Relative Strength Index (RSI), a momentum indicator used to measure whether a market is overbought or oversold, has fallen to 29. This is its lowest level in several months, and RSI readings below 30 typically suggest oversold conditions, which can often precede short-term price bounces.
On the daily chart:
- •BTC is currently touching the lower trendline of the falling wedge for the third time.
- •The overall wedge structure remains intact; however, any decisive close below the $90,000 level would invalidate this pattern.
- •Should the pattern be invalidated, the next significant liquidity cluster is identified at $88,000, followed by $84,000, both of which are zones that have historically shown strong buying activity.
This period of price compression suggests that a substantial directional move in the market is imminent.
Elevated Panic Selling
Data from Glassnode indicates that short-term holder (STH) realized losses have surged to $427 million per day, calculated using a 7-day exponential moving average. This figure represents the highest level recorded since November 2022. Short-term holders are typically investors who have acquired their coins recently, and their current selling at a loss is a strong indicator of panic and stress within the market.
These realized losses now exceed the levels observed at the previous two market cycle bottoms, clearly indicating that panic selling is elevated and actively increasing. For the market to avoid further downside, bullish forces must successfully defend the base of the falling wedge.
Furthermore, Swissblock previously reported that the supply held by short-term holders experiencing losses has climbed to levels consistent with prior capitulation phases. These phases typically occur when less committed market participants exit their positions under significant pressure.
Short-Term Market Scenarios
Considering the current chart pattern and prevailing market sentiment, two primary scenarios are considered most likely in the short term.
Scenario 1: Bounce From Wedge Support
If Bitcoin manages to hold the $90,000–$91,000 support zone, the price could potentially rebound towards the $96,000–$98,000 range. Resistance is expected near the upper trendline of the wedge, around $105,000. A successful breach of this level could lead to an extended rally towards $112,000.
Scenario 2: Breakdown Below $90,000
A decisive daily close below the $90,000 mark for Bitcoin could pave the way for a decline towards $88,000, where significant liquidity clusters are located. Further downside could extend to $84,000, a broader demand zone. The increasing realized losses among short-term holders and weak ETF inflows heighten the probability of this scenario occurring.
The Crypto Times' Perspective
Bitcoin is currently testing the most critical support level of its ongoing pullback. Indicators such as oversold momentum, rising realized losses among short-term holders, and the compression within the falling wedge pattern all suggest that the market is approaching a significant decision point.
A potential bounce is possible if bulls can successfully maintain the $90,000 floor. However, a failure to defend this crucial zone could trigger a deeper price correction, sweeping towards the $88,000 and then $84,000 levels before stability can be re-established. The next 24 to 48 hours are expected to be pivotal in determining whether Bitcoin stabilizes or continues its current correction.
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