Bitcoin Price Crashes to $84,000 – Is $70,000 Next?

Source: CryptoNewsNet Original Title: Bitcoin Price Crashes to $84,000 – Is $70,000 Next? Original Link:

Market Overview

Bitcoin experienced a sharp decline today following a brief rally near $90,000, dropping to $84,544 as the sell-off extended into its second month.

Current metrics:

• 24-hour change: -2%
• 7-day high: $89,220 (currently 5% below)
• Weekly low: $84,596
• Trading volume: $56 billion
• Market capitalization: $1.69 trillion
• Circulating supply: ~19.96 million BTC out of 21 million total

What Triggered the Pump?

The brief rally was catalyzed by U.S. Consumer Price Index data showing inflation rose 2.7% year-over-year in November—lower than expected. Core CPI fell to 2.6%, the lowest since early 2021. Bitcoin surged from intraday lows near $86,000 to test $89,000, as traders interpreted the cooler inflation report as a potential signal for looser Federal Reserve policy in 2026. CME FedWatch data suggested slightly higher odds of a rate cut by March, though January moves remain unlikely.

However, the rally fizzled. Bitcoin failed to break $90,000 and retreated to $84,400—a familiar pattern of sharp spikes followed by quick retracements.

What’s Dragging Down Bitcoin?

ETF Outflows: U.S.-listed spot Bitcoin ETFs, once a major demand driver, have experienced net redemptions. These outflows remove institutional support that previously helped stabilize prices, making breakouts above $89,000 difficult to sustain.

Mixed Economic Signals: Recent labor market data showed U.S. unemployment rising to 4.6%, its highest since 2021. Job growth remains uneven, complicating Federal Reserve policy decisions and suggesting a more cautious approach despite easing inflation.

Political Variables: Public statements from political leaders urging lower interest rates add complexity to the macro picture, though markets have largely treated these as noise.

Technical Consolidation: Bitcoin is consolidating rather than trending, with resistance forming just below $90,000. Strong supply above this level remains held by investors from prior rallies.

Long-term Outlook vs. Near-term Pressure

Analysts at Bitwise recently suggested Bitcoin could break its historical four-year cycle, potentially reaching new all-time highs in 2026 with lower volatility and reduced equity correlation.

The Bitcoin Fear and Greed Index currently sits at 17/100, signaling extreme fear. Historically, readings in this range have coincided with undervaluation, presenting potential opportunities for contrarian investors despite cautious sentiment.

Technical Support Levels

Technical analysts identify $84,000 as a critical support level under pressure. A break below this point could trigger:

• Initial test of the $72,000–$68,000 zone
• Potential decline toward $70,000 if support fails
• Likely bounce attempts from lower levels, potentially retesting $84,000

Resistance extends from $94,000 to $118,000. Bulls will need substantial buying volume to overcome these levels.

Short-term momentum favors sellers. Last week’s weekly candle closed in red, failing to sustain gains near $94,000. Bears are well-positioned to push prices lower this week.

At writing time: Bitcoin trades at $84,812 with $56 billion in 24-hour volume.