Bitcoin, the leading cryptocurrency, is making headlines as it struggles to maintain its footing above the critical $90,000 support level. Despite a brief rally above $93,000 earlier this week, BTC has faced downward pressure, and analysts remain skeptical about a potential short-term recovery.
Volatility Hits Bitcoin Hard
According to Dr. Sean Dawson, head of research at Derive.xyz, the market is currently experiencing a surge in volatility. Over the past two weeks, short-term volatility (30-day) has jumped from 41% to 49%, while long-term volatility (180-day) climbed from 46% to 49%. These metrics highlight increased market uncertainty, causing traders to adopt cautious positions. Furthermore, the put skew, a key sentiment indicator, has fallen significantly, suggesting rising demand for downside protection in the options market.
Why the $90k Level Matters
The $90,000 price point for Bitcoin is a psychological and technical barrier that traders are closely monitoring. If BTC dives below this level, it could trigger an extended decline towards the next major support at $85,000. Recent price actions reveal Bitcoin dipping to $89,000 only to rebound, with its Relative Strength Index (RSI) sitting at 29—near oversold territory. On the other hand, the Moving Average Convergence Divergence (MACD) lines remain bearish, suggesting sellers still hold the upper hand.
Short-Term Outlook for Bitcoin
Market sentiment remains bearish as the BTC/USD daily chart paints an inefficient trend. The probability of Bitcoin finishing 2025 above $100,000 has fallen to 30%, while there is now a 50% chance it will close this year below $90,000. Despite these concerns, if the $90k support continues to hold, Bitcoin could aim for a recovery towards $94,253, which previously acted as a key resistance level.
Long-term enthusiasts may look to take advantage of price dips. For those interested in securing assets or trading options, platforms like Coinbase provide a reliable way to buy and manage Bitcoin and other cryptocurrencies.
Crypto Market: Broader Implications
The recent downturn in Bitcoin is part of a larger trend affecting the broader cryptocurrency market. Many investors are banking on the resilience of digital assets, such as Ethereum and Solana, which could see increased attention if Bitcoin continues to falter. Additionally, macroeconomic factors such as interest rate decisions and job market data in the United States may heavily influence the crypto landscape in the coming months.
As the year-end approaches, all eyes remain on the outcome of the December 26 options expiry, with a particular focus on the $80,000 strike. Traders and long-term investors alike should closely monitor key support and resistance levels to navigate this volatile market effectively.
