Bitcoin News Update: Triple Bearish Divergence in Bitcoin Suggests ETF Rally May Be Unstable
- Bitcoin trades near $86.6K, down 31.3% from October peak amid $3.5B November ETF outflows and $2B liquidations. - Technical analysis flags "triple bearish divergence" as price hits higher highs while momentum indicators weaken. - Spot Bitcoin ETFs see $238M inflows but face $90K resistance; Ethereum ETFs gain $175M yet ETH remains below $3,000. - Key support at $85K risks accelerating sell-off to $80K, with 50–60% retracement targeting $34,409–$44,100 if bearish pattern completes.
Bitcoin Faces Uncertain Outlook Amid Mixed Market Signals
Bitcoin is currently navigating a challenging environment, with its price hovering around $86,600—over 30% below its high of $126,200 reached in October. This significant drop highlights ongoing volatility across the cryptocurrency market. Investors are paying close attention to technical indicators and the movement of funds in exchange-traded funds (ETFs) to gauge the next direction for Bitcoin.
Recent data shows that November saw $3.5 billion withdrawn from Bitcoin ETFs, even as spot Bitcoin ETFs attracted $238 million in new investments. Despite these inflows, Bitcoin continues to struggle with the $90,000 resistance level, which has repeatedly prevented further gains and remains a significant psychological and technical barrier.
Technical Analysis Raises Red Flags
Market technician Tony Severino has identified a "triple bearish divergence" on higher timeframes. While Bitcoin’s price has achieved three consecutive higher highs, momentum indicators such as the RSI and MACD are losing strength. Severino interprets this as a sign that the underlying bullish trend is weakening, suggesting that the market may be running out of steam. This view is supported by recent events, including Bitcoin’s dip below $84,000 and $2 billion in liquidations, both influenced by broader economic uncertainty and a shift toward risk aversion.
ETF Flows and Price Movements: A Delicate Balance
The relationship between ETF activity and cryptocurrency prices remains crucial. While spot Bitcoin ETFs ended the month with $238 million in inflows, Ethereum ETFs have also seen varied results. Over a two-day period, Ethereum ETFs attracted $175 million, with major contributions from BlackRock and Fidelity. However, Ethereum’s price is still trading below $3,000, unable to recover its July 2024 peak, highlighting a disconnect between ETF inflows and actual asset performance. This situation reflects the market’s vulnerability, as institutional withdrawals and economic headwinds continue to exert pressure.
Key Support and Resistance Levels
- If Bitcoin falls below $85,000, it could trigger accelerated selling, potentially pushing the price down to $80,000—a move consistent with typical corrections in Bitcoin’s four-year cycle.
- A sustained rise above $88,000 may pave the way for another test of the $90,000 level, although ongoing institutional outflows remain a concern.
- For Ethereum, the 50-day exponential moving average at $2,420 is a crucial threshold. Failure to close above this level could extend the current bearish trend.
Broader Crypto Market Trends
Weakness in derivatives trading is also evident, particularly for XRP, where open interest in futures contracts has dropped to $3.57 billion. Meanwhile, the triple bearish divergence highlighted by Severino suggests that Bitcoin could experience a significant pullback of 50–60%, potentially targeting prices between $44,100 and $34,409. While this scenario is consistent with past bear market corrections, analysts caution that it is a potential setup rather than a certainty, emphasizing the importance of prudent risk management.
Looking Ahead
Bitcoin’s future trajectory will depend on its ability to maintain key support levels and attract continued ETF investment. For now, the market remains cautiously optimistic but is overshadowed by technical vulnerabilities and shifting institutional sentiment. Macroeconomic developments are likely to play a decisive role in shaping the next phase of the cryptocurrency landscape.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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