Bitcoin Tests $86K Support: Technical Analysis Points to Consolidation Before Potential Rally to $100K
Bitcoin (BTC) is currently trading under $87,000, which is a drop of around 6% in the last 24 hours and a new monthly low of about $86,400.
Quick overview
- Bitcoin is currently trading under $87,000, marking a 6% drop in the last 24 hours and a new monthly low.
- Analysts suggest that Bitcoin may consolidate between $85,000 and $100,000 for the next few weeks, with potential for a bullish reversal.
- Concerns over macroeconomic conditions and ETF outflows could lead to deeper declines if key support levels fail to hold.
- Stablecoin reserves on exchanges have reached a record $72 billion, indicating potential buying power for future market surges.
Bitcoin BTC/USD is currently trading under $87,000, which is a drop of around 6% in the last 24 hours and a new monthly low of about $86,400. The selloff is similar to the general weakness in risk assets. After Nvidia’s results announcement, U.S. stocks gave up early gains, and the Dow gave up a 700-point climb to close down. The total value of the crypto market has dropped by more than 8%, going from $3.31 trillion to about $3.09 trillion. Liquidations have also gone up by more than $1 billion, with forced closures of Bitcoin long positions accounting for more than $57 million.
Q1 2025 Fractal Suggests Bullish Reversal Structure
Even if Bitcoin is sluggish right now, expert Cas Abbé has found a strong connection between the way Bitcoin’s price has been moving recently and the positive reversal pattern that appeared in Q1 2025. During that time, BTC lost steam near its all-time high, fell below important support levels, and stopped following rising stock markets. It finally hit rock bottom in a zone where it had been accumulating for several weeks.
The recent correction looks almost exactly like that structure. The U.S. tariff war caused the selloff in the first quarter. This time, it was worry over a possible AI bubble that caused the selloff. These worries weighed heavily on tech stocks before Nvidia’s solid sales projection helped stabilize the markets. Abbé thinks that BTC will probably stay between $85,000 and $100,000 for three to four weeks, and the fractal pattern makes it more likely that it will retest the $100,000 resistance level by the end of the year.
BTC/USD Oversold Conditions and Technical Support Levels
Analyst BitBull backs up the bullish turnaround thesis by pointing to Bitcoin’s descending channel structure and the fact that it was highly oversold on Thursday. BTC is currently trading around the lower end of a multi-week slump. This area has been a good place for people to buy during past corrections. The most important thing is that Bitcoin’s weekly relative strength index (RSI) has dropped into oversold territory for the first time in months. This is a signal that has traditionally been associated with local bottoms.
Also, the Mean Reversion Oscillator has printed its first green oversold bar in months. This is a traditional sign of a bull market bottom that has come before big rallies in prior cycles. Bitcoin has usually made cyclical bottoms and then started to rise again when this indicator has moved into its green oversold zone and stayed above the 35 line of structural support. These technical indicators, along with the RSI reading and the support from the falling channel, point to BTC rising to the $98,000 to $100,000 level in the next several weeks.
The Bearish Case: Rising Wedge Breakdown Points to $30K
Not all analysts agree with this positive view. Analyst AlejandroBTC has been much more negative, saying that Bitcoin has definitely broken out of a massive rising wedge pattern that he has been watching for months. A rising wedge breakdown usually means the conclusion of a big trend in classical technical analysis, and the measured move shows that the price will drop a lot.
AlejandroBTC says that the structure in this case leads to a long-term goal near $30,000, which is a level that has been a support zone many times in the past on the weekly chart. This is the worst-case scenario for Bitcoin, but it shows how technically weak it is if current support levels fail to hold and macro conditions keep getting worse.
“Max Pain” Zone: IBIT and MicroStrategy Cost Basis Levels
André Dragosch, the head of research for Bitwise Europe, has added to the pressure by describing Bitcoin’s “max pain” zone, which lies between two important cost-basis levels: BlackRock’s IBIT at $84,000 and MicroStrategy’s treasury near $73,000. Dragosch says that the final cycle bottom is most likely to happen somewhere between these levels. He calls them “fire-sale” pricing since they would mean a complete reset of market positions.
This change is already showing up in the flow of money. On Tuesday, IBIT saw its worst single-day outflows of $523 million. This brought the total amount of money that ETFs have lost over the past month to $3.3 billion, or 3.5% of all assets under management. MicroStrategy’s net asset value has just dropped below 1, which means that the market now values the company’s stock at a lower price than its Bitcoin holdings. This is usually an indication of tighter liquidity and higher risk aversion.
Macro Headwinds: Fed Rate Cut Uncertainty and Liquidity Constraints
Because of a government shutdown, important labor data has been delayed, making the macroeconomic picture less clear. This means that the Federal Reserve has less information to work with before the December FOMC meeting. The chances of a rate decrease have dropped to only 41.8%. The minutes from the Fed show that the committee is having trouble balancing the risks of relaxing too soon with the fact that inflation has been at 3% for a long time.
If the Fed doesn’t lower rates in December, liquidity could stay low, just like it was when Bitcoin dropped sharply in early November. If there are no cuts, economists think BTC will trade between $60,000 and $80,000 until the end of the year, when liquidity will stay low until the economy becomes clearer.
But there is a bright side: stablecoin reserves on exchanges have hit a record $72 billion, which is the same pattern that happened before every big Bitcoin surge in 2025. This means that there is a lot of dry powder ready to be used when the market settles down and people feel more sure.
Bitcoin Price Prediction: Consolidation Before Breakout
Taking into account the weight of technical evidence and historical trends, the most likely outcome is that the price will stay between $85,000 and $100,000 for the next three to four weeks. The combination of oversold RSI readings, Mean Reversion Oscillator indications, and sliding channel support shows that powerful hands are quietly buying up supply at current levels.
If this accumulation period goes as planned, Bitcoin might rise to the $98,000 to $100,000 range by the end of the year. The Q1 fractal pattern suggests that it could test the psychologically important six-figure threshold again. But if the support zone between $84,000 and $85,000 doesn’t hold, especially if ETF outflows keep happening and the Fed stays hawkish, it could lead to deeper declines down to $73,000 or lower.
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