As BTC’s Post-Fed Price Decline Extends, This Key Contrary Indicator Offers New Hope
Bitcoin (BTC)’s post-Fed price drop to $96,000 activated a key contrarian indicator that previously marked the end of price pullbacks.
On Wednesday, the Fed cut benchmark borrowing costs as expected but raised only two rate cuts for 2025, down from four expected in September. The central bank emphasized that it is not interested in participating in a potential government plan to build a strategic BTC reserve.
Since then, BTC has fallen more than 8%, hitting lows near $96,000 at one point. At the time of writing, the cryptocurrency was changing hands near $97,500, down nearly 10% from the record high of $108,266 reached earlier this week, CoinDesk data show.
The losses caused the 50-hour simple moving average (SMA) to sink below the 200-hour SMA, confirming a bearish crossover. The pattern suggests that the ongoing pullback could develop to a deeper one, although it failed to live up to its reputation during the recent bull run.
Bitcoin experienced several pullbacks during its post-US election rally from $70,000 to over $100,000, and each of these dips culminated in a bearish crossover of the 50- and 200-hour SMAs.
The latest crossover, therefore, offers hope to bulls hoping for another move into six figures above $100,000.
A potential bounce could face resistance near $106,000, a level identified by the descending trendline, which represents recent price declines. A breach of that would open the doors for record highs.
It is important to note that patterns do not always work as expected, and the opposite indicator discussed above can fail, possibly leading to a deeper decline. The first sign of trouble will be if prices move below the overnight low of $96,000, which could expose the swing low around $91,000 recorded on December 5.
