Fresh Hope Arises as BTC’s Price Dips Post-Fed Extends, Key Contrary Indicator Shows

Bitcoin’s (BTC) price drop to $96,000 following the Fed’s actions has triggered a key contrary indicator that has historically signaled the end of pullbacks.

After the Fed cut interest rates as anticipated, BTC plummeted over 8% to lows near $96,000. Currently, the cryptocurrency is trading near $97,500, down almost 10% from its recent record high of $108,266. This drop has caused the 50-hour simple moving average (SMA) to cross below the 200-hour SMA, indicating a bearish trend. However, this pattern has not always been reliable during recent bull runs.

During BTC’s rally from $70,000 to over $100,000 post-U.S. election, each pullback ended with a bearish crossover of the 50- and 200-hour SMAs. The latest crossover has raised hopes for bulls looking for a move above $100,000.

BTC’s hourly charts. (TradingView/CoinDesk)

A rebound may encounter resistance around $10,600, indicated by the descending trendline from the recent drop. Breaking above this level could propel BTC to new all-time highs.

It’s worth noting that patterns can sometimes deviate from expectations, and the discussed contrary indicator may not hold true, leading to further downside potential. A breach below $96,000 would be a warning sign, with the next support level around $91,000 from Dec. 5.

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