Shorts fight back, BTC's key support is near 88,000.

Source: BitpushNews

On Tuesday, the Crypto Assets market continued the pullback trend.

According to Bitpush data, BTC continued to be under pressure after reaching a high of $95,000 in early trading. Longs attempted to rebound in the afternoon, but encountered bearish resistance at $94,800 and fell below $91,000 at one point. At the time of writing, the BTC trading price was $91,646, with a 24-hour decline of 2%. The AltCoin market performed even weaker, with over 90% of the top 200 Tokens by Market Cap recording a decline.

Currently, the overall market capitalization of Crypto Assets is 3.14 trillion US dollars, with Bitcoin’s dominance rate at 57.3%.

In terms of US stocks, the S&P, Dow Jones, and Nasdaq indices all closed pump, up 0.57%, 0.28%, and 0.63% respectively.

The reason for the decline may be that the leveraged market is overheated.

The decline in BTC may be partly due to the excessive Margin Trading in the market. When there is Fluctuation in the market, these Margin Trading will be forced to Close Position, leading to further price decline.

Data analysis platform IntoTheBlock expressed a similar view, they believe that the pullback of BTC can be attributed to the pump of funding rate, which ultimately leads to a bearish market sentiment. However, as the funding rate returns to its normal range, further leveraged Close Position should be restricted.

Cryptocurrency futures market analyst Byzantine General pointed out that in terms of volume, the current PA of BTC is similar to some previous local tops. He said, ‘At this time, BTC is likely to experience a period of Sideways oscillation. However, during this period, some other cryptocurrencies may perform well.’

From a technical perspective, BTC may retest the liquidity area near the psychological level of around $90,000, and may even further decline to $85,000.

This is because BTC pumped very quickly between November 6 and November 22, without a significant imbalance between buying and selling, this rapid pump usually accompanies subsequent pullbacks to balance supply and demand. Therefore, BTC may pull back to the previous support level or even lower levels to digest the previous gains.

In addition, with the Relative Strength Index (RSI) falling below 50 for the first time since November 6th, it is expected that sellers will dominate the PA in the next week, which may lead to a period of consolidation for BTC prices below $95,000.

The encryption analyst CoinSeer believes that the important support for BTC is in the range of $85,000-$88,000. If it falls below this range, it may trigger a large-scale cascade liquidation.

TradingView analyst TradingShot wrote: “The significant pullback of BTC yesterday caught the market off guard. There are several fundamental reasons behind this: first, the diminishing excitement after the election, and second, the pressure brought by the psychological barrier of $100,000. However, there is a more important technical reason that has been overlooked.”

Analysts pointed out: “As shown in the chart, there has been a Fibonacci channel in the past three cycles (including the current cycle). This channel started with a strong Rebound at the top formed in December 2013. The top of that cycle coincided with the 0.236 Fibonacci level of the cycle, which has blocked the rise in both the Bull Market on June 24, 2019, and May 11, 2024.”

TradingShot says the recent pullback is because BTC has touched the “first real resistance of the Bull Market cycle”.

He explained, “This is the Fibonacci trend line that has been resisting the pump recently (November 22nd). We can call it the ‘first true resistance of the Bull Market cycle’ because it is the first major resistance level encountered before the Bull Market cycle reaches its peak. In the past two cycles, the high points have occurred at the 0.0 Fibonacci level, which is the top of the channel (highlighted in red circles in the chart). The red dot at the end of 2025 is not a prediction, but for comparison.”

TradingShot also observed: “The duration of each Bull Market cycle in the past is about 150 weeks (1050 days). If this pattern repeats, the peak may occur at the end of September or the beginning of October.”

He pointed out, “Trying to grasp the high point and sell is much better than giving a precise price. Equally interesting is that, despite the resistance BTC has faced technically, the current uptrend began at the low point on August 5, 2024, precisely at the 1-week MA 50 (blue trend line). Technically speaking, as long as this trend line remains effective, the cyclical bull market should be able to remain intact.”

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