Bitcoin: Navigating the Bullish Battle Above $100K

Bitcoin: Navigating the Bullish Battle Above $100K

This weekend has failed to deliver the relief retail traders hoped for, bringing more retracements and the emergence of bearish patterns. The highly anticipated “Santa rally” seems increasingly out of reach as macroeconomic uncertainty weighs heavily on the market.

Several major cryptocurrencies are underperforming today, with notable losers including SUI ($SUI), down 6.5% after peaking at its all-time high of $4.89 last Friday, along with PEPE ($PEPE), BONK ($BONK), and Polkadot ($DOT), all dropping roughly 6%. Adding to the downturn, Cardano ($ADA), Fantom ($FTM), and Hedera ($HBAR – click for full insight) have each fallen by over 5%, reflecting a broad retreat across the altcoin market.

The global crypto market cap currently sits at $3.6 trillion, marking a 1.2% decline in the past 24 hours, while trading volume has dropped sharply by 23.93% (typical for Saturday). Bitcoin‘s dominance has increased slightly to 55.74%, as investors shift toward safer bets amid the growing uncertainty. Meanwhile, the Altcoin Season Index on CoinMarketCapsuggests Bitcoin remains firmly in control of the market, leaving altcoins struggling to gain traction.

It’s easy to feel pessimistic in moments like these, but seasoned investors know the drill. After all, if you’ve been through a few of these wild four-year cycles, the strategy remains the same: zoom out, ignore the noise, and prepare for strategic buying opportunities.

Let’s break down the market leader,  the king of cryptocurrencies: Bitcoin ($BTC):

The Rectangle Pattern and $74K Support

Let’s first address the elephant in the room: the rectangle pattern that formed back in February this year, shortly after the spot ETF approval in January 2024. This pattern broke to the upside on the election results, hitting its full target of $99,000 perfectly before becoming a strong resistance level (now flipped into main short-term support). Now, the rectangle’s upper edge at $74,000 is playing a critical support role, often considered the “line in the sand” for many BTC investors.

Adding further support to this rectangle is the 200-day moving average (green line), which currently sits at $69,000 and is gaining upside momentum. Historically, the 200-day MA serves as a strong dynamic support in bull markets. However, Bitcoin’s significant decoupling above this level also raises concerns of a potential return-to-mean scenario, which could see the price retrace to align with this long-term trend. Have a good look at 1d:

If $74,000 were to break with confirmation, it could trigger a wave of exits, with the next logical stop being a test of the rectangle’s bottom around $49,000–$50,000. While such a correction doesn’t have to happen (or at least not until the next bear market), it’s worth noting that a breakdown to $74K would represent a 27-28% retracement from the ATH. Brutal as it sounds, this would be a relatively normal correction within a BTC bull market.

The $107K Bull Flag: Still in Play?

One of the most significant bullish macro formations for Bitcoin this year began with the SEC’s groundbreaking ETF approval. The January–May 2024 bull flag (green on the 1D chart) remains active, with a clear target at $107,000. This target is no joke, especially since the flag’s lower trendline extension has acted as a reversal point three times, reinforcing its significance.

Interestingly, on the 4-hour chart, another bullish pennant pattern (purple) mirrors this flag’s target at $107,500. Two independent patterns aligning at the same price level give further weight to this target, making it a key projected take-profit zone.

This alignment of patterns illustrates Bitcoin’s broader bullish potential, provided short-term challenges don’t derail momentum.

The Rising Wedge and Current Challenges

While the long-term outlook points higher, BTC is currently trapped in a rising wedge on the 4-hour chart, a bearish pattern by classical charting standards. Notably, the wedge’s bottom was formed by two significant December flash crashes, which now act as critical levels to watch.

$101,000 is holding—for now. While Bitcoin briefly broke above six figures, the breakout lacked volume confirmation and momentum, leaving the price vulnerable to a pullback. By the time you read this, the $100K+ price might already be history.

If the rising wedge breaks down, the target aligns almost perfectly with the 0.382 Fibonacci level just below $87,000.

A close below $90,000 would also invalidate the bullish pennant pattern, significantly weakening the bullish case.

Momentum Check: RSI Signals Mixed but Worrisome

The daily RSI remains relatively ‘bullish’, currently holding just above 64 after cooling down from an overbought period in November. This steady position is supported by a strong RSI trendline that has been rising since August 2024 (visible in the chart as the red trendline). As long as RSI respects this trendline and continues its gradual upward movement, Bitcoin retains the momentum for further gains.

However, concerns arise when we analyze the 4-hour RSI, which reveals signs of exhaustion. The RSI only reached 76 during BTC’s December 5 ATH of $103,700, forming a lower high compared to earlier overbought readings. This is an example of bearish divergence, where price makes a higher high while RSI makes a lower high. In simpler terms, this means that while the price climbed, the underlying momentum weakened—a classic red flag that often precedes corrections or consolidations.

Adding to the mixed sentiment, volume during BTC’s breakout above $100,000 was lackluster, a classic red flag for sustainability in bullish price action.

As of now, Bitcoin remains bullish as long as it holds above the 50-day SMA (yellow line) on the daily chart, currently sitting near $99,000, which also aligns with a key horizontal support level. For bulls to regain full control, the wedge must be invalidated by a strong daily close above $103,000, preferably with a notable volume spike.

Key Ideas to Trade This

Breakout Above $103K: A strong daily close above $103,000 with a clear volume spike would invalidate the wedge and signal momentum to target $107K. Watch for follow-through on the 4-hour timeframe to confirm the breakout.

Trading the Wedge: 

Use the lower trendline of the wedge for potential long entries on price reversals. Confirmation can come from bullish candle patterns (e.g., hammers) or RSI rebounding from oversold zones.

Do Nothing: 

The safest strategy is most likely to just wait. With the FOMC meeting looming on Wednesday, markets are likely to remain hesitant. Instead, consider scouting for entry points to capitalize on a likely retracement (Sunday to Monday night would be my guess).

Summary: A Complicated Saturday Night

As of Saturday night, Bitcoin remains in a delicate situation. Trading above the short-term bullish 50 SMA (yellow line) on the daily chart and holding the horizontal support at $99,000 keeps BTC in a bullish posture. However, for the king to truly stay strong on this timeframe, the rising wedge must be invalidated with a strong close above $103,000, preferably backed by a significant volume spike.

Adding to the complexity, the Fear & Greed Index has returned to Extreme Greed (80) territory, following a brief dip during recent liquidations.

Source:  https://coinmarketcap.com/

The problem? Those liquidations failed to reset sentiment properly, leaving the market overly optimistic without clearing enough leverage. This makes the current setup even more perilous, as excessive greed often precedes sharp corrections.

Meanwhile, the Altcoin Season Index currently sits at 60, signaling a phase of indecision. While the index remains above neutral territory, the sharp drop from last week’s 83 confirms what we’re seeing across the market: altcoin season is suspended—not entirely called off, but certainly losing steam. Altcoins will likely continue struggling until Bitcoin (and $ETH – linkto analysis) either consolidates with strength or resolves its current patterns.

Let’s be real—this article could feel outdated by Monday if BTC does print a decisive candle soon to target the bullish patterns described. December, despite Moonvember’s fantastic run, has been tougher than expected. The crypto market is undoubtedly more complex now than last month—or even last weekend.

The easy part of this bull market is over. Santa or no Santa, things are about to get wild. And when Trump takes office alongside the new, allegedly crypto-friendly leadership, we’ll be in for a market environment no one’s truly prepared for.Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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