Bitcoin experienced another short leverage flush late Sunday, briefly falling below $88,000 before quickly recovering above $91,500.
Bitcoin News
Bitcoin is holding a crucial Fibonacci support level that analysts warn must be defended to prevent a potential decline to $76,000, matching lows last seen in April.
Crypto analyst Daan Crypto Trades identified the 0.382 Fibonacci retracement zone as the key technical level requiring defense from bulls. A break below this support could trigger a fall to April lows around $76,000, representing the last major support before testing lower market structure.
Bitcoin experienced another short leverage flush late Sunday, briefly falling below $88,000 before quickly recovering above $91,500. Analyst Bull Theory characterized the move as manipulation during low-liquidity weekend trading designed to liquidate both leveraged long and short positions.
The Federal Open Market Committee's monetary policy meeting concluding Wednesday will announce a rate decision, with a 0.25% cut widely anticipated by markets. Fed Chair Jerome Powell previously signaled a non-linear, data-dependent easing path rather than a clear cutting cycle, according to 10x Research head Markus Thielen.
Markets lost momentum following October's rate cut after Powell's cautious messaging. Thielen noted the market expects a 25-basis-point cut on Dec. 10 followed by a cautious tone, which would mirror October's hawkish execution and sustain mild pressure through year-end.
Volumes remain depressed with ETF flows turning negative, leaving upside participation thin while Bitcoin trades within the $70,000 to $100,000 range. Implied volatility continues to compress, making downside risk more pronounced than upside potential, according to Thielen's analysis.
Apollo Capital's Henrik Andersson told reporters that while a Fed rate cut this week is already priced in, the outlook statement will determine market direction. He expressed cautious optimism for next year despite current pressure.
The Fed chairman replacement scheduled for May next year will likely result in more interest rate cuts during 2026, which should support risk assets including crypto, according to Andersson. Nick Ruck from LVRG Research added that upcoming jobs and inflation data releases could unlock renewed liquidity inflows if they align with expectations for continued monetary easing.
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