Bitcoin Rally Shows Signs of Rejection
Bitcoin’s rebound from its Nov. 21 low carved out a rising channel marked by higher highs and higher lows. However, the structure developed within the context of a broader downtrend, making it vulnerable to failure. Last week’s price action reinforced that risk.
BTC printed a bearish weekly candle characterized by a long upper wick and a small red body, signaling strong selling pressure above the $94,000 area. This type of rejection often reflects a market dominated by “sell-the-rally” behavior, where traders use strength to exit positions rather than build new exposure.
The failure to extend gains following the Fed decision further undermined bullish confidence. While rate cuts typically support risk assets, Bitcoin was unable to capitalize, slipping toward $88,000 over the weekend before stabilizing near $89,500.
Nasdaq Weakness Adds Macro Pressure
Concerns are amplified by developments in U.S. equity markets. The Nasdaq Composite fell nearly 2% last week, forming a bearish engulfing candle that erased the prior week’s gains. On a weekly timeframe, the index also remains under a bearish MACD signal, suggesting downside momentum could persist.
Historically, Bitcoin has shown a strong positive correlation with tech stocks, particularly during equity drawdowns when crypto often underperforms on a relative basis. Market makers and trading firms have repeatedly noted that during Nasdaq-led risk-off phases, Bitcoin tends to amplify volatility rather than decouple.
With the Nasdaq rebound now stalling, the macro backdrop that supported Bitcoin’s recent bounce appears increasingly fragile.
Treasury Volatility Signals Tightening Conditions
Another important signal is emerging from the U.S. rates market. The MOVE index, which tracks implied volatility in Treasury notes, printed an inverted hammer candlestick last week after a prolonged decline. This pattern often marks an early reversal point, hinting at renewed volatility in government bond markets.
Rising Treasury volatility tends to tighten global financial conditions, reducing liquidity appetite across risk assets. Bitcoin has historically moved inversely to the MOVE index, meaning an upswing in bond volatility could cap or reverse crypto gains.
Key Levels and Market Outlook
From a technical perspective, Bitcoin now faces increasing risk of breaking down from its countertrend channel. A decisive move lower could open the door to a retest of the $80,000 zone, where the prior sell-off found support.
On the upside, bulls would need to reclaim the $94,000–$95,000 area to reestablish short-term momentum. Even then, heavy resistance looms between $96,000 and $100,000, reinforced by the 50-day moving average and the Ichimoku cloud.
Until those levels are cleared with conviction, Bitcoin remains vulnerable to macro-driven pullbacks, with volatility in equities and bonds likely to dictate near-term direction.
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