As Bitcoin’s Post-Fed Price Decline Persists, This Significant Contrarian Indicator Provides New Optimism: Godbole

A significant contrarian indicator is signaling green, bringing hope to BTC enthusiasts eager for a resurgence into six figures.

What to know:
BTC has fallen almost 10% from its all-time highs.
This downturn has triggered a pivotal indicator that has historically signified the conclusion of price retracements.

Bitcoin’s (BTC) post-Fed price slump to $96,000 has activated a vital contrarian indicator that has historically indicated the end of price retracements.

On Wednesday, the Federal Reserve slashed the benchmark borrowing rate as anticipated but projected only two rate cuts for 2025, a decrease from the four expected in September. The central bank emphasized its disinterest in engaging with a potential government initiative to create a strategic BTC reserve.

Since then, BTC has plummeted over 8%, reaching lows close to $96,000 at one point. As of this writing, the cryptocurrency is trading around $97,500, down nearly 10% from the record peak of $108,266 achieved earlier this week, according to CoinDesk data.

The declines have caused the 50-hour simple moving average (SMA) to drop beneath the 200-hour SMA, confirming a bearish crossover. This pattern suggests that the current pullback could progress into a more substantial one, although it has not fulfilled its historical reputation during the recent bull run.

Bitcoin has encountered several pullbacks during its post-U.S. election surge from $70,000 to beyond $100,000, and each of these downturns has concluded with a bearish crossover of the 50- and 200-hour SMAs.

Consequently, the latest crossover brings optimism to bulls anticipating a renewed advance into six figures above $100,000.

A potential rebound might encounter resistance near $106,000, a level marked by the descending trendline that represents the recent price decline. Breaching that threshold would pave the way for record highs.

It's crucial to keep in mind that patterns don’t always unfold as anticipated, and the contrarian indicator mentioned earlier may not succeed, potentially leading to a more pronounced drop. The initial sign of concern will be if prices dip below the overnight low of $96,000, which could expose the swing low of approximately $91,000 recorded on December 5.