Bitcoin’s steep decline has shaken the market, sending the Fear & Greed Index down to 24 (Extreme Fear), a level where major bottoms have often formed in the past. The price recently broke down from a large trading range (91,500 – 106,500) and has now reached the measured target of the breakdown.
However, bullish signs are emerging. A positive divergence on the RSI and MACD histogram hints that selling momentum is slowing, and the last two candles could form a bullish engulfing pattern, a potential trend reversal signal.
The key question now: Is this a dead-cat bounce, or the start of a major recovery?
The Breakdown – Target Hit
Bitcoin traded in a range between 91,500 and 106,500 for months before finally breaking down. This triggered a sharp drop, with price falling as low as 76,600, near the expected measured move target from the range breakdown.
While the trend is still bearish, BTC is now bouncing, and the reaction here will determine the next major move.
Bullish Signals – Signs of a Potential Reversal?
✅ Positive RSI Divergence: The RSI made a higher low while price made a lower low. This suggests weakening bearish momentum and the possibility of a reversal.
✅ MACD Histogram Turning Up: While still negative, the MACD histogram is printing higher bars, another sign that the downtrend is losing steam.
✅ Bullish Engulfing (If Confirmed at Close): The last two candles appear to be forming a bullish engulfing pattern, a classic reversal signal. If BTC closes strong today, this could invite buyers back into the market.
The Bullish Scenario: A Strong Bounce Ahead?
If BTC closes above 81,500 and sees follow-through buying, this could trigger a move toward 87,000 – 91,500, where the breakdown area and EMAs (21 & 34) act as resistance.
Key Resistance to Watch:
- 87,994 (21 EMA)
- 91,500 (Breakdown Level & Major Resistance)
A break back above 91,500 would be a game-changer, as it would invalidate the bearish breakdown and open the door to retesting 100K+.
Bottom Line for Bulls: A confirmed bullish engulfing close and follow-through above 81,500+ would be the first signal of a bottoming attempt.
The Bearish Scenario: More Downside Ahead?
If Bitcoin fails to hold 81,500 and selling pressure resumes, the downtrend remains intact, and we could see a new leg lower.
Key Support Levels:
- 76,000 (around recent low)
- 71,641 (previous tops from May)
- 68,999 – 66,093 (deeper target range)
If BTC breaks below 76,000, the next major liquidity zone sits around 71,600 – 66,000, where buyers may step in aggressively.
Bottom Line for Bears: A failure to hold today’s bounce would keep BTC in a downtrend, increasing the chances of a deeper decline toward 71K or lower.
Final Thoughts: The Next Few Days Are Critical
With Extreme Fear dominating the market, the probability of a bounce is increasing, but Bitcoin must confirm strength before calling a bottom.
Bulls need: A strong daily close above 81,500 and follow-through buying toward 87K – 91K.
Bears need: A failure to reclaim key levels and a drop back below 76,000, opening the door to 71K – 66K.
Big Question: Is this a generational buying opportunity, or is the worst yet to come?
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