Bitcoin's (BTC) impressive rally towards the psychological $100,000 mark faces a significant challenge, as a technical analyst warns of a potential pullback unless this critical resistance threshold is breached. A deeper retracement could see the cryptocurrency fall to a low of $85,600, shaking market confidence.

TD Sequential's warning

On November 12, 2024, a technical analyst identified as Ali highlighted bearish signals on Bitcoin's 12-hour chart using the TD Sequential indicator. This tool, known for its ability to identify trend reversals, suggests Bitcoin may be heading for a pullback.

"BTC needs to close above $100,535 to invalidate the sell signal," Ali stated on X, warning over 89,000 followers. Failing to surpass this level could trigger a pullback to $91,583 or, in the worst-case scenario, $85,610.

TD Sequential, developed by Tom DeMark, evaluates price trends in two stages: Setup and Countdown. The Setup identifies when a price movement consistently exceeds prior highs or lows, implying trend continuation. The Countdown then confirms trend exhaustion and signals the potential for reversal. Ali's application of this tool to Bitcoin indicates weakening momentum as BTC approaches the $100,000 level.

Current market volatility

As of November 25, 2024, Bitcoin is trading within a narrow range between $97,076 and $97,547, signaling hesitation among traders. Oscillators like the Relative Strength Index (RSI) and Stochastic indicate neutral momentum but also warn of a potential overbought condition.

Meanwhile, trading volume has decreased, further reflecting cautious sentiment. Long-term moving averages, including the Exponential Moving Average (EMA) and Simple Moving Average (SMA), still maintain a bullish outlook. However, momentum is noticeably waning near the $100,000 mark, amplifying the importance of this resistance level.

Important levels to pay attention to

  • Resistance: A decisive close above $100,535 could negate the bearish TD Sequential signal and spark new buying interest. Such a move could likely push Bitcoin into uncharted territory, fostering further optimism.

  • Support: Analysts have identified $95,000 and $93,000 as initial support zones. If these areas fail, deeper retracement levels of $91,583 and $85,610, according to Ali's forecasts, will come into play.

Bullish and bearish scenarios

Breaking through the $100,000 level would reinforce Bitcoin's bullish trajectory, attracting sidelined investors and solidifying long-term sentiment. Such a price surge could set the stage for a sustainable rally, potentially targeting higher psychological milestones.

Conversely, failing to break above $100,000 could confirm a bearish forecast, initiating a pullback. A drop below $93,000 could further undermine confidence, with an extremely pessimistic $85,610 marking a significant retracement in the ongoing bullish market.

Traders face a delicate balance as Bitcoin hovers near a decisive threshold. On one hand, the cryptocurrency maintains strong bullish fundamentals, driven by institutional interest and macroeconomic factors. On the other hand, weakening momentum and bearish technical signals suggest caution.

The $100,000 level has emerged as a psychological barrier and a technical support point, turning it into the battleground for Bitcoin's next major move. Traders are advised to closely monitor the closing price, volume momentum, and resistance tests.

In a market driven by sentiment and technical signals, Bitcoin's ability or failure to surpass $100,000 is likely to shape its short-term trajectory. Until clarity emerges, caution remains paramount.