Bitcoin Darts Below $100K as Momentum Resets From December Highs
Market Structure Shifts Lower
- Bitcoin dropped nearly 18% from monthly highs on Monday, as the retreat from recent record levels tested key support for the first time since the world’s largest cryptocurrency was swept up in the global financial sell-off earlier this month.
- The sharp January rally had pushed prices well above $90.5K, a resistance level that capped bullish momentum in December’s final week.
- A plunge beneath the threshold in the current selloff could expose BTC/USD to further losses and potentially threaten the long-term uptrend off the late-December low.
Bitcoin experienced its worst monthly drop since August after falling from $111K to $90.5K. In recent weeks, the cryptocurrency lost nearly $20K in value. This correction comes as Ethereum began to outperform Bitcoin, catching the attention of some institutional investors, and it has also been supported by U.S. buyers. Domestic institutions are indeed buying the dip according to Coinbase premium data. Now, the big question on everyone’s minds: Is this 18% dip enough to recharge the batteries before the next leg up, or is the correction just beginning with a retrace to $80K on the cards?
| Metric | Value |
|---|---|
| Asset | BITCOIN (BTC) |
| Current Price | $90514.40 |
| Weekly Performance | 6.35% |
| Monthly Performance | -17.74% |
| RSI (Relative Strength Index) | 39.7 |
| ADX (Average Directional Index) | 41.9 |
| MACD (MACD Level) | -4059.26 |
| CCI (Commodity Channel Index, 20-period) | -28.79 |
Momentum Cools to 39.72 Without Capitulation Signal
The RSI reading stands at 39.72. This is the first journey to oversold conditions since the October washout low that gave way to the November rally. What’s interesting about this ‘falling knife’ scenario is that it was a slow bleed rather than a reactionary wick that allowed trapped longs to escape without a mass exodus.
Comparable RSI setups in September and in early November both led to strong relief rallies once the oscillator popped back above the 35-40 zone. For swing traders, this balanced-to-weak momentum sets up a compelling scenario where downside exhaustion converges with institutional bid support, especially given the Coinbase premium has turned positive as smart money buys the dip.
ADX at 41.91 Signals Mature Trend Nearing Pivot Point
When it comes to trend strength, the ADX reading of 41.91 implies that this is not a sideways range but a real, strong-trending move. A high ADX suggests that sellers have been in firm control of price action since the December highs, but, generally speaking, ADX readings above 40 often signal exhaustion points where trends turn, or at least consolidate, temporarily.
In simple terms, when ADX goes above 40 and price is reaching significant support, it usually marks one of two events; an intense continuation that clears out any last long holders, or an about-face as the overextended trend ‘snaps’ back. With the Coinbase premium still in play and RSI going oversold, the latter is an increasingly likely scenario, but day traders should know to expect high volatility as these sort of high-ADX conditions resolve.
90-Day Moving Average Emerges as Critical Bull Defense at $95.8K
The price is compressing in a tighter range, which is likely to culminate with a big move as it often does during contraction phases. Depending on whether the 50-day EMA holds as support will give us a clue as to whether this expansion move will be local in nature or carry the underlying trend with it. The 100-day EMA will be the next key test at $100.1K – that held three advances in the first half of December before giving way. The previous resistance area subsequently becomes the new target on any bounce, with the 200-day EMA at $104.9K the more lofty destination that would confirm a resumption of bullish market technicals. It’s also interesting to note that institutional flows through Coinbase picked up almost to the day that price began testing those longer-term averages.
Support Architecture Builds From $90.5K Through $81K Zone
There are several levels for us to turn our gaze to the upside, with the main target being the above-mentioned trendline that connects 2017 and December 2021 highs, which is currently sloping down at $98.5K to $99K. The higher low from February at $79.5K becomes critical support.
Bulls are defending a multi-layered support structure beginning from current levels around $90.5K, going through the weekly pivot at $88.1K, and having major confluence at $81K where monthly S1 crosses with historical accumulation zones. The Coinbase premium going into this $90-91K region turning positive indicates that these levels are being seen as attractive entry points by institutional players.
In a technical perspective, momentum remains strong on both the daily and weekly charts. The Relative Strength Index (RSI) on the daily has come off overbought levels but still reads a healthy 67. The weekly RSI is also strong at 67 with plenty of room to run higher. The Moving Average Convergence Divergence (MACD) is giving no sell signals on either timeframe.
Bulls Require Decisive Reclaim of $100K to Restore Uptrend
If the price of Bitcoin were to go back above $100K, reaching the 100-day Exponential Moving Average and then the 200-day EMA would be the bulls’ mission, with that second one landing at around $105K. Finally, the December highs of $111K would serve as the high target. The positive Coinbase premium backs this notion, which implies a potential recovery rally should U.S. institutional demand become the catalyst.
If Bitcoin loses the $90K handle and breaks below the weekly pivot at $88.1K on volume, this would initiate the bearish scenario. It would catch recent dip buyers and probably escalate the price dropping to the $81K monthly S1. This could lead to positions being flushed down to the $80K psychological level.
Considering the oversold bounce setup on the Relative Strength Index (RSI), the elevated Average Directional Index (ADX) signaling trend exhaustion, as well as institutional accumulation on Coinbase, the most likely short-term scenario is Bitcoin will consolidate between $88,000 and $95,000 before making a relief rally toward the $100,000 resistance cluster.
