This analysis is presented by Omkar Godbole, a Chartered Market Technician and analyst at CoinDesk.
The recent three-week price surge of Bitcoin BTC$89,629.86 appears to be at risk of reversing as the Nasdaq index, known for its tech-heavy composition, encountered resistance last week, suggesting potential challenges ahead.
After reaching lows around $80,000 on November 21st, BTC has been on an upward trajectory above $90,000. It has formed higher lows and highs within a rising channel that counters the broader downtrend.
The recovery seemed promising initially due to a decline in the dollar index following the Federal Reserve’s rate cut on Wednesday. Additionally, a longer-term trend indicator hinted at a possible bullish shift in BTC’s momentum.
However, these factors did not lead to sustained upward movement. Instead, BTC fell from approximately $93,000 on Friday to nearly $88,000 by Sunday before stabilizing around $89,600 as of this writing.
Last week concluded with BTC forming a bearish candle characterized by a long upper wick that indicated rejection above the $94k mark and featured only a small red body with minimal lower wick. This typical rejection pattern suggests diminishing bullish momentum and indicates dominance of “sell-the-rallies” behavior at elevated prices.
BTC: Daily and weekly candlestick charts (TradingView)
This pattern raises concerns about further declines for BTC towards the $80k level alongside Nasdaq’s halted recovery from its November lows.
The Nasdaq dropped nearly 2% last week while forming a bearish engulfing candle that reversed gains made in the previous week. Coupled with bearish MACD signals observed over weekly timeframes; this suggests potential downside volatility could affect BTC due to their strong positive correlation—especially evident during NDX downturns when Bitcoin often experiences amplified impacts as noted recently by Wintermute.
Nasdaq’s weekly chart (TradingView)
An additional warning sign for bulls investing in risk assets is reflected through the MOVE index which gauges 30-day implied volatility within U.S Treasury notes.
The MOVE index formed an inverted hammer candle last week—a candlestick formation appearing after an extended downtrend—which typically signifies early signs of bullish revival ahead.
MOVE’s weekly chart shown using candlesticks format (TradingView)... . . .
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