Bitcoin is facing a pivotal moment as multiple technical analyses point to growing structural weakness and the potential for a transition into a broader bearish phase. The cryptocurrency is currently trading near $88,750, holding steady after a recent pullback, but is trapped below critical technical resistance levels.
Key technical signals are flashing warning signs. Analyst Rekt Fencer's two-week chart analysis indicates Bitcoin has broken key structural support following a multi-year parabolic advance, marking the first major trend violation since the current bull cycle began. This weakness is reinforced by the Relative Strength Index (RSI) slipping below the 50 level—a zone historically linked to bearish regimes. RSI hovering near 40 suggests limited historical support if selling accelerates, with previous cycles showing such breaks often precede extended drawdowns. Fading upside volume further weakens bullish conviction, raising the risk of deeper declines toward the $50,000 area if momentum deteriorates further.
A descending channel is capping short-term recoveries. According to Dami-Defi's 12-hour futures chart, Bitcoin has been trapped inside a well-defined descending channel since its October peak above $110,000. Each recovery attempt has stalled below the falling resistance trendline, with the most recent rejection near $89,000 reinforcing the pattern of lower highs and persistent seller control. Price compression near the lower boundary around $86,000 to $88,000 suggests a directional breakout is approaching. A break below this $86K–$88K support zone could accelerate a move toward $80,000, especially with futures markets amplifying volatility and potential liquidation-driven moves.
Failed retests confirm downside risk. AlΞx Wacy's eight-hour chart highlights a failed retest of a broken ascending trendline. Bitcoin briefly spiked into the $87,000 to $89,000 zone before rejecting, confirming this zone as new resistance. Such retest failures often precede continuation moves, especially when accompanied by rising sell volume. Volume behavior during the retest signals distribution rather than accumulation, with downside projections extending toward the $80,000 to $82,000 range.
However, broader fundamentals provide some counterbalance. From a macro perspective, Bitcoin remains underpinned by easing inflation expectations and a shifting US rate outlook following recent US CPI data showing continued disinflation. Lower real yields tend to reduce the opportunity cost of holding Bitcoin. Institutional positioning also remains constructive, with spot Bitcoin ETFs continuing to anchor long-term inflows despite short-term trader rotations during volatility.
The market structure shows absorption, not panic. Bitcoin's failure to break decisively below the $84,500–$85,000 zone suggests longer-term buyers are stepping in on weakness. Repeated lower-wick candles near this area point to absorption rather than forced liquidation—a pattern often seen during corrective pauses inside broader uptrends. On the 4-hour chart, Bitcoin remains inside a broad ascending channel that has guided price since late October. The RSI has recovered toward 57, holding above oversold levels and hinting at fading downside momentum.
The outlook presents two clear paths. If Bitcoin reclaims and holds above the $89,200 pivot zone, projections point to a recovery toward $92,000, followed by a retest of $94,200, the previous range high. Failure to reclaim resistance keeps downside risk open toward $84,500, with deeper support near $80,600. The convergence of long-term momentum loss, short-term trend resistance, and failed retests places Bitcoin at a critical juncture. The coming weeks may define whether this correction deepens into a sustained bear phase or stabilizes above major support zones.
