Bitcoin Critical Support Make it or BREAK it to 100k
2024-11-27

Bitcoin (BTC) recently reached a new all-time high of $99,830 on November 22, 2024, but has since retraced, falling over 8% to trade around $91,377. This correction brings BTC to a critical 61.8% Fibonacci retracement level at $91,000–$92,000, a key area often watched by traders for potential support.

BTC has gained 120% year-to-date and 34% this month, influenced by the U.S. election of pro-crypto lawmakers and Donald Trump’s commitment to making the U.S. a global leader in digital assets. Currently, BTC is forming a descending wedge pattern, a bullish setup with a historical 66% chance of upward breakout. If BTC breaks out of this wedge, it is likely to see a strong upward move, surpassing $100,000 and potentially setting new highs. However, failure to hold the $86,000–$89,000 support zone could result in a significant drop to the $68,000 level or lower.

Key Technical Factors:

1. Fibonacci Retracement (61.8% Level):  
BTC has retraced to the golden ratio of 61.8%, a level often associated with strong support in bullish trends. If this level holds, we could see a bounce back toward $95,000 and potentially retest the all-time high.

2. Descending Wedge Pattern:  
A descending wedge indicates potential for a breakout to the upside, provided the price stays above key support levels. A breakout confirmation could push BTC above $95,000 and potentially beyond $100,000.

3. Support Levels:  
Immediate: $91,000–$92,000.  
Key Zone: $86,000–$89,000. Loss of this range could result in a steeper correction of 18–33%, targeting $68,000–$70,000.

4. Volume Trends:  
Declining volume during the pullback suggests a potential lack of conviction from sellers, strengthening the case for a rebound.

Fundamental Drivers:

1. Core Personal Consumption Expenditures (PCE) Price Index (November 29):  
The PCE Price Index is the Fed's preferred inflation gauge. A higher-than-expected PCE could increase expectations for interest rate hikes, strengthening the U.S. dollar and putting downward pressure on BTC. Conversely, weaker inflation data could bolster BTC, as it may signal a less aggressive Fed, keeping monetary conditions favorable for risk assets like cryptocurrencies.

2. Nonfarm Payrolls (December 6):  
Employment data will reflect the health of the U.S. labor market. A strong report could strengthen the dollar, negatively impacting BTC. Weak payroll data could spark concerns over the economy, prompting investors to seek hedges like BTC, boosting its price.

Market Sentiment:

Macro Tailwinds:  
Pro-crypto political developments in the U.S., including Trump’s vocal support for Bitcoin and efforts to build a national BTC stockpile. BTC remains a hedge against inflation and fiat currency debasement, a narrative bolstered by economic uncertainty.

Macro Risks:  
The possibility of a stronger dollar due to rising yields or hawkish Fed signals. Continued selling pressure if BTC loses the $86,000–$89,000 range.

Trading Plan:

1. Bullish Scenario:  
A confirmed breakout above $92,000–$95,000 with strong volume opens up targets at $100,000+. Positioning for a breakout from the descending wedge with stops below $89,000.

2. Bearish Scenario:  
If BTC breaks below $86,000, short-term targets are $70,000–$68,000. Consider hedging or scaling out of long positions in this scenario.

Conclusion:  
Bitcoin is at a pivotal technical and fundamental juncture. While the descending wedge pattern and 61.8% Fibonacci retracement level suggest potential for a bullish breakout, upcoming macroeconomic data such as the PCE Price Index and Nonfarm Payrolls will play a critical role in shaping BTC’s direction. A breakout from the wedge could drive BTC past $100,000, while failure to hold key support levels risks a deeper correction.

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