Bitcoin Price Outlook: BTC Faces Headwinds in Quest for $90K
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Bitcoin (BTC) steadied above $89,000 on Monday, following a failed attempt to break above a descending trendline last week. While modest inflows into US-listed spot Bitcoin ETFs indicate improving institutional interest, technical indicators and warnings from veteran trader Peter Brandt signal that downside risks remain prominent.
Traders and investors should approach the market with caution as BTC faces multiple technical and macroeconomic headwinds. This article from LFtrade gives readers a clear and thorough explanation of the subject.
BTC Holds Above $89,000 Amid Technical Resistance
Bitcoin has struggled to reclaim the $90,000 level, remaining capped by a descending trendline formed from multiple highs since early October. This trendline coincides with the 61.8% Fibonacci retracement level at $94,253, derived from the April low of $74,508 to the all-time high of $126,199 set in October. The confluence of trendline and Fibonacci resistance makes this a critical zone for BTC’s short-term recovery.
As of Monday, BTC hovers above $89,000, showing signs of stabilization but failing to establish bullish momentum. If selling pressure continues, the next significant support is located at $85,569, corresponding to the 78.6% Fibonacci retracement level, which could serve as a crucial area for buyers to step in.
Veteran Trader Warns of Potential Sharp Correction
Renowned commodity trader Peter Brandt has cautioned that BTC could experience a steep decline after breaking below its parabolic support line. Historically, when BTC violated this parabolic trajectory, the cryptocurrency declined by at least 80% in each cycle. Given the current price of around $89,000, Brandt’s analysis suggests a potential correction toward $25,240, highlighting the persistent downside risks in the market.
The parabolic support line has been a reliable indicator of BTC’s long-term bullish trajectory. Its breach often signals a major trend reversal and the possibility of prolonged bearish pressure.
Macro Risks: Bank of Japan Rate Hike
Another critical factor influencing BTC’s short-term outlook is the upcoming Bank of Japan (BoJ) interest rate decision. The central bank is expected to raise borrowing costs by 25 basis points (bps) on Friday. Historical data shows that BTC has often declined following BoJ rate hikes, with notable pullbacks of 27% in March 2024, 30% in July 2024, and 30% in January 2025.
If history repeats, a BoJ rate increase could trigger a roughly 30% correction, potentially pushing BTC down toward $63,000. This macroeconomic event adds an additional layer of risk for traders already navigating technical bearish signals.
Institutional Demand Shows Mild Improvement
Despite bearish technical conditions, institutional participation shows slight improvement. According to SoSoValue data, US-listed spot Bitcoin ETFs recorded a weekly inflow of $286.60 million, following a minor outflow of $87.77 million the previous week. This indicates growing institutional interest, albeit modest compared to the larger inflows observed in mid-September.
For BTC to sustain a recovery toward $90,000, these inflows would need to intensify, signaling stronger confidence from institutional investors. ETF inflows often act as a leading indicator for price trends, as institutional buying can provide crucial support during periods of technical weakness.
Technical Indicators Signal Bearish Momentum
Technical analysis highlights ongoing bearish pressure for BTC. The Relative Strength Index (RSI) on the daily chart sits at 44, below the neutral level of 50, suggesting slight bearish momentum.
Meanwhile, the Moving Average Convergence Divergence (MACD) lines are converging, with the potential for a bearish crossover. Should this occur, it would reinforce the negative short-term outlook and increase the likelihood of further declines.
The rejection from the descending trendline last week underscores the market’s inability to sustain higher prices. Combined with Fibonacci resistance and weakening momentum indicators, BTC’s short-term trajectory remains vulnerable to corrections.
Bitcoin Price Forecast: Key Levels to Watch
Key levels to watch include resistance between $90,000 and $94,253, marked by a descending trendline and the 61.8% Fibonacci retracement. On the support side, $85,569 aligns with the 78.6% Fibonacci retracement, while $63,000 represents a potential BoJ-triggered correction.
Key indicators show the RSI at 44, signaling slight bearish momentum, MACD convergence hinting at bearish potential, and a possible parabolic support line breach, all suggesting caution for traders.
In summary, BTC’s current price action reflects a cautious market sentiment. While mild institutional inflows provide some optimism, technical indicators and warnings from experienced traders highlight the persistent risk of downside corrections.
Conclusion:
Bitcoin remains stabilized above $89,000, yet struggles to regain $90,000 amid bearish technical pressure and looming macro risks. While slight improvements in institutional demand offer some support, historical trends suggest that BTC could face significant corrections if the parabolic support breach and upcoming BoJ rate hike materialize as expected.
Technical traders should remain vigilant, keeping an eye on key levels and momentum indicators to anticipate potential market swings.