Bitcoin Faces Potential Pullback Below $90K as Key Indicators Turn Bearish
Bitcoin’s (BTC) much-anticipated surge past $100,000 remains elusive, with prices retreating to $94,500 overnight. A combination of technical and market indicators suggests the possibility of an extended pullback, potentially dipping below $90,000.
Bearish Options Market Signals
One key indicator is the 25-delta risk reversal (25RR), which gauges the relative demand for out-of-the-money (OTM) call options versus OTM puts. On Deribit, calls expiring this Friday are trading at a discount to puts, resulting in a negative 25RR, according to Amberdata. This is the first negative reading in over a month and reflects a growing demand for downside protection.
Additionally, Monday’s options trading activity showed a clear shift toward bearish bets. Traders on Paradigm, an over-the-counter liquidity network, sold call spreads while buying put options tied to BTC. The 24-hour change in 25RR across timeframes also indicates that the previous bullish bias for calls expiring in December and January has softened.
Coinbase Premium Turns Negative
U.S. demand for bitcoin, a critical driver of the recent rally from $70,000 to $99,500 following the U.S. election, appears to be waning. This is evident from the renewed discount in BTC prices on Coinbase compared to Binance, a metric known as the Coinbase premium.
The negative Coinbase premium, combined with a bearish skew in the exchange’s order book, suggests weaker stateside buying pressure and leaves BTC vulnerable to adverse market news.
Bearish RSI Divergence
The relative strength index (RSI) has also signaled waning bullish momentum. While BTC hit a fresh high above $99,000 last Friday, the RSI failed to follow suit, creating a bearish divergence. This indicates that the rally’s momentum has likely run its course for now.
Price Outlook
Intraday charts suggest support in the $87,000 to $88,000 range, indicating that any deeper declines could stabilize at those levels. Despite the short-term bearish signals, long-term technical studies remain positive, suggesting the broader uptrend is still intact.
For now, traders are watching for signs of stabilization as bitcoin grapples with increasing selling pressure and a potential reset before making another attempt at the six-figure milestone.
