Market sentiment has frozen, yet I see hope.
On this Christmas night, the cryptocurrency market is not ringing with jingle bells but is filled with alarms from technical indicators.
Last night, when most Western traders had already entered Christmas mode, Bitcoin ruthlessly broke through the key support of $88,000. My phone was instantly flooded with various alarm messages: 'Bitcoin forms a bearish pennant!' 'Death cross has appeared!' 'ETF funds continue to flow out!'
I take a deep breath and carefully examine the chart data. Bitcoin is currently priced at $87,936, down about 7% from its high of $94,600, and the MACD indicator on the 4-hour chart clearly shows a short-term bearish strength.
The market sentiment index is expected to remain in the 'fear' range (20-40), which is a noteworthy contrarian indicator.
01 Market Status: Technical Indicators Sound Alarm
On this Christmas Eve, the market did not bring festive cheer but instead presented a bleak outlook. Bitcoin not only fell below the psychological level of $88,000 but also triggered multiple bearish technical signals.
The most concerning thing is the obvious 'bearish triangle flag' pattern, which usually consists of a sharp decline (flagpole) followed by a converging consolidation (flag surface), viewed by technical analysts as a signal that the downtrend may continue.
What cannot be ignored is that Bitcoin's 50-day moving average has crossed below the 200-day moving average, forming a classic 'death cross.' Historically, this signal is often seen as an important sign of a weakening medium to long-term trend.
At the same time, Ethereum has not escaped the situation, with prices struggling around $2,950, once again testing the psychological defense line of $3,000. Currently, Ethereum has fallen below the key moving average system, forming a bearish arrangement.
02 Fund Flow: What Are Institutional Players Thinking?
The fund flow data reveals deeper issues. This week, Bitcoin ETFs listed in the U.S. faced nearly $1 billion in capital outflows, setting a record for the highest single-day outflow since the launch of the spot ETF in March 2024.
Large institutions like BlackRock and Fidelity have recorded significant capital outflows from Bitcoin ETFs. This indicates that after the psychological support level of $90,000 was breached, institutional investors may be reducing their exposure.
However, I believe this is not necessarily a signal that institutions are abandoning Bitcoin. Data shows that the current correlation between capital flow and price is only about 13-15%, with a significant same-day effect but weak influence the next day. This seems more like a normal adjustment in the market maturation process rather than a panic sell-off.
The open interest in futures remains around $59 billion, reflecting some deleveraging rather than a complete market exit. Traders have not chosen to close positions but continue to hold leveraged positions, indicating that underlying market confidence is still present.
03 Key Support and Resistance: My Exclusive Analysis
Based on years of trading experience, I have the following judgments on Bitcoin's key positions:
On the downside, direct support is in the $86,500-87,000 area, which has been tested multiple times recently. If it fails to hold, the next important support is around $85,000. A stronger support area is in the $84,000-85,000 demand zone, which has attracted short-term buyer interest.
On the upside, the recent rebound's first resistance level is between $88,300-88,900, where the short-term moving averages converge. More importantly, resistance is in the $90,000-92,000 area, which is a cluster of previous peaks from multiple rebounds.
For Ethereum, $2,900 is a key dynamic support, and core resistance is around $3,050-3,070. Bulls need to reclaim the psychological level of $3,000 to stabilize the sentiment across the altcoin market.
04 Market Sentiment: Opportunities Hidden in Crisis
When the market is shrouded in fear, I tend to pay extra attention to opportunities. According to the working principle of the cryptocurrency fear and greed index, when the market is in a state of extreme fear, it often hides buying opportunities.
Current market sentiment is in such an extreme state. The cryptocurrency fear and greed index is expected to remain in the 'fear' range (20-40), and without new catalysts, this sentiment may persist during the holiday period.
Historically, during the crash in March 2020 due to the COVID-19 pandemic, Bitcoin fell below $4,000, and the fear and greed index plummeted to extreme fear levels (10-15 points), but the market rebounded thereafter. After the Terra/Luna collapse in June 2022, the sustained panic sentiment eventually became a precursor to the market bottoming out.
I have always believed in the investment philosophy of 'being greedy when others are fearful.' When there is widespread pessimism on social media, even those who have long been bullish on Bitcoin start to fall silent, it is often a good time to accumulate.
05 Holiday Operating Strategy: Wait and See, Act When the Time is Right
Against the backdrop of thin holiday liquidity, I suggest adopting a defensive strategy:
For short-term traders, it is possible to sell high and buy low within the range of 86,500-88,500, but strict position control and stop-loss settings are necessary. Due to insufficient liquidity, any slightly larger buy or sell orders may trigger severe price fluctuations, significantly increasing risk.
For medium to long-term investors, if the price irrationally drops below $85,000, it may be worth considering gradually building a position. The strong support areas are in the ranges of $76,900-80,216 and $81,500-85,072, which are key levels for potential buyers to accumulate Bitcoin.
My personal plan is: to watch lightly during the Christmas period, but if Bitcoin falls below $85,000, I will start to build a position gradually. After all, there is strong support in the range of $70,000-75,000, and this level may become a 'higher low of attraction,' laying the foundation for the next significant rally.
In the afternoon, I checked the market again, and Bitcoin was still oscillating around $87,500, with trading volume continuously shrinking. Holiday liquidity exhaustion is a double-edged sword; it exacerbates the decline but also accumulates energy for a turnaround after the holiday.
Looking back in history, Bitcoin has quietly bottomed out several times when panic struck. In December 2018, Bitcoin bottomed out at $3,200 and began a new bull market; after the crash in March 2020, it rose over 800% within a year.
On this Christmas night, while most people only see warning signals in technical charts, I have already begun preparing for the upcoming market situation. The real directional choice of the market will become clear after the New Year holiday. By then, the return of institutional funds, the recovery of ETF fund flow data, and the macro policy expectations for the new year will jointly determine the market direction.
Risk markets are never short of opportunities; what is always lacking is patience and cash. Click to follow my column, and let's prepare together for the potential new cycle coming in 2026.
Follow me@崎哥说币 #比特币与黄金战争 #比特币流动性 $BTC #加密市场观察
\u003cc-41/\u003e
