From Euphoria to Despair: Bitcoin's Path ForwardBitcoin prices pushed above the $100K mark, sparking euphoria across the world. However, that excitement quickly turned into despair as the euphoria marked a local top in prices. Yesterday, significant gains in altcoins were wiped out.
The reason is simple: the returns in altcoins have been phenomenal, and investors are eager to book profits. Additionally, funding fees were through the roof but have since come down sharply. Yesterday, we also saw liquidations of roughly $1.5 billion, according to data from Coinglass.
Looking at Bitcoin prices today, the type of decline we saw on December 5—roughly 11.64% from the all-time high—is normal. My main scenario now is for prices to remain sideways for a few more days before potentially pushing to the upside. The biggest issue, however, is the massive divergence on the RSI, as seen in the chart below. This divergence suggests we could experience a steeper slide in Bitcoin prices, especially since Bitcoin has not yet faced the larger blowouts seen in altcoins.
With that in mind, I see three possible scenarios. The first is consolidation followed by a bullish breakout, which would be my preferred outcome. The second scenario involves being bullish around the $93,000–$90,700 range. If that level doesn't hold, we could potentially see a larger slide toward $85,000, representing an 18% decline from the all-time high. Around that level, or possibly as low as $80,000, we are likely to see strong buying interest as traders look to "buy the dip" before pushing prices back to the upside.
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