Bitcoin briefly dipped below the $100,000 mark after hawkish comments from the US Federal Reserve, sparking fears of a potential downtrend. As Bitcoin continues to play around $100,000, a bearish pattern has begun to emerge, adding to the fears of investors.
Despite the key psychological level being quickly reclaimed, anonymous trader Rekt Capital highlighted the development of a “bearish engulfing” candlestick formation over the week.
This pattern, if confirmed by the end of the week, could signal further downside for Bitcoin. Rekt Capital cautioned that while the pattern is developing, it has not yet been fully confirmed, leaving room for potential changes in market sentiment.
The drop below $100,000, which occurred between 2 and 3 a.m. UTC on December 19, saw Bitcoin briefly touch a low of $99,047 according to CoinMarketCap. This coincided with a broader market sell-off triggered by the Federal Reserve’s announcement of a 25 basis point rate cut and indications of fewer cuts than expected in 2025.
Despite the bearish tech index and market reaction to the Fed announcements, some analysts remain unimpressed. US-based Bitcoin ETFs are also more popular than ever, having enjoyed a 15-day streak of inflows since Bitcoin hit the $100,000 mark.
Some argue that such declines are normal for Bitcoin, pointing to multiple similar corrections since October. Others suggest that the response to short-term news from central banks shows a lack of understanding of Bitcoin’s fundamental value.
These fluctuations follow Bitcoin’s recent surge that surpassed $100,000 earlier in December. Analysts have attributed the surge to several factors.
Rekt Capital notes that current market conditions are in line with historical trends during price discovery phases, which often see corrections around the seventh and eighth week. While some may see the recent drop as a “flash crash,” Rekt suggests that the correction could last another week or more.