Is Bitcoin’s Lowest Point Behind Us? BTC’s Price Action Moves Against the December $108K High.

Bitcoin (BTC) has recently shown price action that contrasts with the exhaustion of its uptrend above $108,000 in mid-December. Traders are now asking: Has Bitcoin’s price weakness reached its bottom, or is further decline still to come?

The signs lean toward the former, as Monday’s price action demonstrated a quick recovery from the intraday lows. This behavior is a stark contrast to mid-December when the rally stalled and prices reversed sharply from the record highs above $108,000.

On Monday, Bitcoin initially dipped as investment banks adjusted their expectations for Federal Reserve rate cuts. With the release of strong U.S. jobs data from Friday, some analysts even discussed the potential for rate hikes, which led to Bitcoin dropping below the $90,000-$93,000 support range, alongside declines in major U.S. stock indices.

However, the breakdown of support didn’t last long, and by the close of the day, Bitcoin surged back to $94,000, forming a “long-legged Doji” candle. This candlestick pattern, with a long wick, suggests that while sellers initially drove prices lower, buyers ultimately took control. This pattern is often viewed as a potential sign of a market bottom, particularly when it occurs at key support levels or after a sharp price decline.

The long-legged Doji has appeared at the support zone that has consistently held since late November, indicating that buyers are actively defending this level. This stands in contrast to December 16, when Bitcoin printed a Doji with a longer upper shadow at the $108,000 highs, signaling that the uptrend was running out of momentum and sellers were beginning to assert themselves.

What’s next for Bitcoin?

While Monday’s action hints at a potential bottom, further confirmation is needed. A decisive move above the day’s high of $95,900 would indicate that bullish momentum is gaining strength, prompting traders to initiate new buy positions. Meanwhile, the $89,000 low from Monday is now the critical level for bears to break.

The demand-supply dynamics for Bitcoin continue to lean bullish. As Andre Dragosch, Head of Research for Europe at Bitwise, pointed out, corporate demand for Bitcoin has already outpaced the new supply coming into the market.

Price volatility could rise again with the release of the U.S. Consumer Price Index (CPI) report on Wednesday, which may influence expectations for future Fed rate cuts.

“After Monday’s sharp drop, Bitcoin rebounded from a low of $89K, and traders are now awaiting the U.S. CPI report on January 15. Many major altcoins followed Bitcoin’s movement, with some experiencing deeper losses in the last 24 hours,” said Neal Wen, Head of Global Business Development at Kronos Research. “Traders are now focused on signs of stability, looking for direction on whether Bitcoin will see more downside or a rebound,” Wen added.