Bitcoin’s recent dip below the $100,000 milestone has reignited fears of a bearish turn, following hawkish signals from the US Federal Reserve. The flagship cryptocurrency briefly slipped to $99,047 in the early hours of December 19, according to CoinMarketCap, before rebounding to the critical psychological threshold.
Despite recovering quickly, market watchers have flagged a troubling development: a potential “bearish engulfing” candlestick pattern on the weekly chart. Pseudonymous trader Rekt Capital warned that if this formation is confirmed by the week’s end, it could indicate a deeper downturn for Bitcoin. However, Rekt also emphasized that the pattern remains unconfirmed, leaving room for a shift in market sentiment.
The brief dip coincided with a broad sell-off across financial markets after the Federal Reserve announced a 25 basis point rate cut. Investors were further rattled by the Fed’s signal that fewer rate cuts are likely in 2025 than previously anticipated.
Despite the technical and macroeconomic headwinds, some analysts remain optimistic. Spot Bitcoin exchange-traded funds (ETFs) in the U.S. have seen consistent inflows for 15 consecutive days, underscoring strong institutional interest. Additionally, many in the crypto space argue that pullbacks like this are a normal feature of Bitcoin’s price cycles.
“This kind of correction is not unusual,” noted Rekt Capital, pointing out that Bitcoin often experiences turbulence during its price discovery phases. Historical data suggests corrections around the seventh or eighth week of an uptrend are typical.
Bitcoin’s volatility has been a hallmark of its recent rally, which saw it break the $100,000 barrier earlier this month for the first time. Analysts have credited the surge to a confluence of factors, including growing institutional adoption and optimism around Bitcoin’s scarcity-driven value proposition.
While some investors view the current dip as a “flash crash,” others caution that the correction could extend into the coming weeks. For now, Bitcoin’s ability to maintain its position above $100,000 will be crucial in determining whether it regains upward momentum—or succumbs to the bearish signals looming on the horizon.
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