Bitcoin Bulls on High Alert as Price Dips Below $100,000
The cryptocurrency market experienced a significant shakeup on May 19, with Bitcoin (BTC) plummeting over 4.5% from its intraday high, falling to around $102,000. This marked the largest single-day decline for BTC in over a month and sent ripples through the crypto community, prompting analysts to examine the technical landscape for clues about the future trajectory of Bitcoin‘s price.
Bearish Divergence and Technical Concerns
The decline in Bitcoin‘s price came amidst a broader risk-off sentiment in the market, driven by Moody’s downgrade of the US government’s credit rating due to concerns about rising budget deficits and the lack of a credible fiscal consolidation plan. This downturn amplified existing technical concerns about Bitcoin‘s price action, particularly a bearish divergence observed in the relative strength index (RSI).
While Bitcoin reached a new local high above $107,000 on May 19, the RSI simultaneously printed a lower high, signaling a classic bearish divergence. This discrepancy between price and momentum often serves as a precursor to a trend reversal, highlighting a potential shift in the market’s sentiment.
Key Support Levels and Downside Targets
Following the drop, analysts have been closely monitoring Bitcoin‘s price action for potential support levels. Swissblock analysts note that Bitcoin‘s failure to sustain a breakout above the $104,000–$106,000 resistance range resulted in a push back into a prior high-volume zone, placing immediate support between $101,500 and $102,500 under pressure.
If this level fails to hold, Swissblock identifies the $97,000–$98,500 range as a key downside target based on historical onchain volume and trading activity. This suggests that a break below the $100,000 mark could trigger further downward pressure, potentially leading to a retest of this crucial support zone.
Inverse Head-and-Shoulders Pattern Hints at Potential Retest
On the three-day chart, Bitcoin is exhibiting a potential inverse head-and-shoulders pattern, which typically signals a bullish trend reversal in the long term. However, in the short term, this pattern implies a possible retest of the 50-period exponential moving average (EMA) near $91,000.
The formation of this pattern, coupled with Bitcoin‘s failure to close above the critical $107,000 neckline level, has raised concerns about a potential short-term decline toward the $91,000 support zone. This area has historically served as a turning point for Bitcoin‘s price, triggering bearish reversals in December 2024 and January 2025.
Bullish Potential Remains, but Caution Advised
Despite the bearish signals, a rebound from the $91,000 zone toward the $107,000 neckline could significantly increase Bitcoin‘s odds of rising toward $150,000. This scenario would suggest that the recent decline was merely a corrective pullback within a broader bullish trend. However, given the current technical landscape, analysts are urging traders to exercise caution and carefully manage their risk exposure.
It is crucial to remember that the cryptocurrency market is highly volatile, and market predictions are inherently uncertain. Investors should conduct their own research and make informed decisions based on their own risk tolerance and financial situation.
“Bitcoin grabbed liquidity above the $104,000–$106,000 resistance range but failed to sustain a breakout.” – Swissblock Analysts
