Bitcoin sits on a key 0.382 Fib support as traders eye the Fed, soft ETF flows and rising on-chain “liveliness,” leaving price vulnerable but primed for a relief bounce.
Summary
- Bitcoin trades at a critical 0.382 Fibonacci support, with a breakdown risking a retest of April lows and higher timeframe structure damage.
- Fed meeting, jobs and inflation data, plus weak ETF inflows and low volumes, keep upside limited while volatility compression skews near-term risk lower.
- On-chain “liveliness” and Bitfinex’s seller-exhaustion signal suggest long-term holders are re-engaging, creating conditions for stabilization and a relief bounce.
Bitcoin (BTC) is trading at a critical technical level that could determine the cryptocurrency’s near-term trajectory, according to market analysts monitoring key support zones.
The digital asset is positioned at a crucial Fibonacci support level, with traders warning that a breakdown could push prices toward levels last seen in April, according to technical analysis shared by market participants.
Crypto trader Daan Crypto Trades identified the 0.382 Fibonacci retracement zone as a critical threshold for bullish market participants. “It’s also pretty much the last major support before testing the April lows again, which would break this high time frame market structure,” the trader stated in market commentary.
Bitcoin falls below key support stuck around $92k
Bitcoin briefly fell below a key support level over the weekend during what analyst Bull Theory characterized as a leverage liquidation event before recovering. The analyst described the move as typical low-liquidity weekend price action that resulted in the elimination of both long and short positions.
Market attention is now focused on this week’s Federal Open Market Committee meeting, where a rate cut is widely anticipated by traders. However, cryptocurrency markets have shown muted performance since the October rate reduction, as Federal Reserve Chair Jerome Powell has emphasized a data-dependent approach rather than a predetermined easing cycle.
Markus Thielen of 10x Research noted that traders expect a cautious and potentially hawkish tone from the central bank this week, which could maintain pressure on risk assets. With exchange-traded fund inflows declining and trading volumes decreasing into December, Thielen stated that upside participation remains limited while volatility compression leaves Bitcoin vulnerable to downside moves in the near term.
“Bulls will point to the Treasury General Account rebuild, the end of Quantitative Tightening, and looming rate cuts as a liquidity windfall for Bitcoin,” Thielen wrote in a research note. The analyst added that hypothetical macro tailwinds are “irrelevant if the underlying message lacks conviction and the market structure fails to support a sustained move.”
Nick Ruck of LVRG Research stated that upcoming U.S. employment data and inflation figures may prove equally influential. The analyst said that if the economic data reinforces expectations for continued monetary easing, renewed liquidity inflows could fuel a broader recovery across digital assets.
An on-chain indicator known as “liveliness” is climbing despite subdued price action, according to analysts monitoring blockchain data. The metric measures the balance between coins being transacted and those being held, weighted by age. Analysts stated the divergence suggests renewed underlying demand, with dormant coins moving at levels not observed in years—indicating that long-term holders may be re-entering the market.
The indicator tends to rise during bull markets as older coins move at higher prices, reflecting fresh inflows and greater conviction among market participants, according to analysts.
Last week, cryptocurrency exchange Bitfinex stated the market is showing “seller exhaustion” following a period of heavy deleveraging and exits by short-term holders. “The combination of extreme deleveraging, capitulation among short-term holders, and early signs of seller exhaustion has created the conditions for a stabilisation phase and a relief bounce,” the firm wrote in a market analysis report.
