The post-Fed Bitcoin (BTC) price drop to $96,000 has triggered a crucial contrarian indicator that has historically marked the end of price pullbacks.
The Federal Reserve on Wednesday cut the benchmark borrowing cost as expected, but only planned two rate cuts for 2025, down from four projected in September. The central bank emphasized that it is not interested in participating in a possible government plan to build a strategic BTC reserve.
Since then, BTC has fallen more than 8%, reaching lows near $96,000 at one point. At the time of writing, the cryptocurrency changed hands around $97,500, down nearly 10% from the record high of $108,266 hit earlier this week, CoinDesk data shows.
The losses have caused the 50-hour SMA to fall below the 200-hour SMA, confirming a bearish crossover. The pattern suggests that the ongoing pullback could turn into a deeper one, although it has not lived up to its reputation during the recent bull run.
Bitcoin has seen a few pullbacks during its post-US election rally from $70,000 to over $100,000, and each of these declines has ended with a bearish crossover of the 50 and 200 hourly SMAs.
Therefore, the latest crossover offers hope to bulls hoping for a renewed six-figure move above $100,000.
A possible rebound could face resistance near $10,600, a level identified by the descending trend line, which represents the recent price decline. A violation there would open the doors to record levels.
It is important to remember that patterns do not always develop as expected and that the contrarian indicator mentioned above may fail, which could lead to a deeper decline. The first sign of trouble will be if prices move below the overnight low of $96,000, which could expose the low around $91,000 recorded on December 5.
