Bitcoin bulls launch a key defensive battle, $85,000 support level determines the future trend

On December 17, Beijing time, Bitcoin’s price continues to struggle near the key psychological and technical support level of $86,000. According to the latest market data from Gate, at press time, Bitcoin is approximately at $86,907, down about 2.90% over the past 24 hours.

This price level is regarded as the “last line of defense” for the bulls, and its success or failure will determine whether Bitcoin begins a rebound or falls into a deeper correction zone warned by analysts.

01 Key Price Levels and the Battle Between Bulls and Bears

The current technical landscape of Bitcoin shows a clear front line of attack and defense. Analyst Ted Pillows explicitly states: “BTC is retesting its support zone between $85,000 and $86,000. If Bitcoin loses this level, it is expected to retest the November lows.”

This area not only marks the November low (around $86,325) but also represents the last consolidation base before the previous rally began. From a technical pattern perspective, Bitcoin is testing a downward trend line that started from the October high for the third time.

Each test is accompanied by decreasing volatility and weakening subsequent momentum, indicating that selling pressure is waning rather than intensifying. Crypto trader Crypto King describes this market state as “the market entering a decision phase, which could shape Bitcoin’s next price trajectory.”

02 Warning Signs on Technical Charts

Besides the critical integer levels, another indicator closely watched by seasoned market participants is Bitcoin’s two-year simple moving average (2-Year SMA). Currently, this SMA is around $82,800.

Historically, if Bitcoin’s monthly closing price falls below this SMA, it often signals the onset of a long-term bear market. Conversely, successfully holding or reclaiming this SMA suggests that the main bullish cycle remains intact.

Shorter-term technical indicators also send warnings. Since mid-November, Bitcoin’s 50-day moving average has crossed below the 200-day moving average, forming the so-called “death cross,” a typical medium-term bearish signal.

Currently, Bitcoin’s spot price is below all major moving averages (including the 10-day, 20-day, 50-day, and 200-day), indicating a generally weak trend.

The table below summarizes the key technical price levels currently monitored:

03 Macroeconomic Headwinds and Market Sentiment

Bitcoin’s challenges are not only from internal chart signals. Recently, US employment data has been mixed: while non-farm payrolls exceeded expectations, the unemployment rate rose to 4.6%, hitting a four-year high.

Despite the Federal Reserve having cut interest rates three times in 2025, real yields remain high, exerting ongoing macro pressure on non-cash-flow assets like Bitcoin. Market expectations for a rate cut in January are only around 24%-27%.

Risk asset sell-offs have also spread to the cryptocurrency sector. The high correlation between Bitcoin and US tech stocks persists into 2025, making Bitcoin an “amplifier” of global risk sentiment. This is directly reflected in capital flows: recent large net outflows from Bitcoin spot ETFs, with daily withdrawals reaching about $357 million, the largest single-day outflow since late November.

04 Analyst Opinions and Market Forecasts

Market outlooks vary among analysts, but there is a consensus on the decisive importance of the $85,000 region. Senior market analyst Samer Hasn believes the current environment remains “fragile,” and without positive macro catalysts to reverse sentiment, Bitcoin faces increasing risk of deeper declines, with a short-term discussion already underway about falling below $80,000.

Another well-known analyst, Roman Trading, maintains a bearish stance. He recently reiterated that Bitcoin’s rebound lacks strength and volume support, and the price will ultimately target $76,000. He even states in his analysis: “The bull market is over. Your best bet now is to plan the next bull run when we drop to $50,000.”

However, not all opinions are so pessimistic. TradingView analyst Heniitrading points out that Bitcoin has shifted from a clear downtrend channel into a consolidation zone between $88,000 and $92,500. Within this range, demand zones near $88,000 repeatedly provide support, indicating that buyers are gradually accumulating positions.

05 Investor Strategies and Operational Ideas

For retail investors, strict risk management and close attention to key price levels are crucial in the current market environment.

From a short-term trading perspective, the success or failure of the support zone at $85,000 to $86,000 will be the primary focus. If a clear bullish reversal pattern (such as a long lower shadow or morning star) forms near this zone, it could present a short-term rebound opportunity, with initial targets around $88,200.

If this support is effectively broken (confirmed by daily or weekly closes), market sentiment could further deteriorate. Investors should be alert to prices accelerating toward the next support zone near $82,800 (2-Year SMA), or even the $73,300 to $74,000 area.

Long-term investors might adopt a different perspective. David Hernandez, a crypto investment expert at 21Shares, comments that potential economic tensions could actually reinforce the long-term bullish case for Bitcoin. He believes that if the Fed aims to curb inflation without severely damaging the economy, Bitcoin’s limited supply could make it a more attractive asset.

Future Outlook

Bitcoin’s price is currently hovering near the critical $86,000 cliff. Exchange order book data shows persistent buy orders clustered around $85,000, indicating some market participants are actively defending and trying to absorb selling pressure.

Market fear and greed index has fallen to around 25, in the “fear” zone, approaching the yearly low. Such extreme sentiment is sometimes viewed as a signal that a market reversal may be imminent.