Cryptocurrencies continued their sharp decline, with Bitcoin plummeting to $89,759.4 per coin before rebounding to $90,844.6 per coin.
The decline comes amid a decrease in risk appetite in the markets, and successive blows to technology stocks amid fears of an artificial intelligence bubble on Wall Street.
The decline also came amid doubts about the Federal Reserve cutting interest rates in December and a temporary halt to rate cuts until the true picture of inflation and labor market levels becomes clear after two months of the absence of critical data on which the Fed relies to make its decisions.
The main risk: A false rebound precedes further decline.
Technical context:
The overall trend is strongly bearish, with all indicators confirming this (SuperTrend is bearish at $103,020.50, price is below the Ichimoku cloud, ADX at 37.41 confirms the strength of the bears).
The price is very oversold (RSI: 20.75) and is down -10.98% from the 20-day moving average and -17.04% from the 50-day moving average, increasing the likelihood of a temporary (but deceptive for buyers) bounce.
A critical support zone is at $89,759 . If it is broken, we may see an acceleration of the decline towards the $87,620 and $79,816 areas (127% and 161% Fibonacci levels).
Note: Trading between $90,000 and $95,000 (no-trading zone) is prohibited due to the low risk/reward and excessive chaos following the crash.
Technical signs and monitoring areas
The recent decline : A strong accumulation range between $99,000 and $116,000 was broken (completely ended).
Candles: A huge bearish engulfing candle on 11/13 confirms the selling momentum.
Volume: High trading volumes in downward waves, reflecting the conviction of sellers.
Risk: Any strong rebound could be a trap for hasty buyers.
The most important lesson today
Oversold conditions (RSI below 25) don't always indicate a buying opportunity, especially if the overall trend is strongly downward. It's best to wait for a clear bounce and then observe if the bounce fails to enter with the trend, not against it.
