Introduction
Bitcoin CME futures have consolidated after the recent explosive rally. The crypto hit a new all-time high of $108,960 in December, but the market now appears to be catching its breath. Let’s see what the technicals are telling us.
Technical Analysis
Bearish Divergence on RSI
- The RSI (Relative Strength Index) has formed a bearish divergence, with the price creating higher highs while the RSI has made lower highs.
- This is a classic warning sign of weakening momentum, the rally may need a breather before continuing higher.
50-Day SMA Acting as Dynamic Support
- The 50-day SMA at $90,174 is trending upward and providing a strong support base for the current consolidation.
- Any pullbacks toward this level would be expected to find buyers.
Higher Highs & Higher Lows Still Intact
- The uptrend remains valid, with a consistent pattern of higher highs and higher lows. Until this structure is broken, the broader bullish trend is likely to dominate.
Psychological Barrier at $100,000
- The $100,000 level remains a psychological and technical resistance. Breaking above this would likely trigger buying momentum, with rapid price acceleration toward $110,000.
Bullish Case: Rally Resumes Toward $110,000
- Support Zones: The 50-day SMA ($90,174) and 200-day SMA ($70,391) are dynamic support levels for bulls to defend.
- Momentum Breakout: A close above $110,000 would confirm a continuation of the bullish trend, targeting $120,000 as the next major resistance.
- Fundamental Backdrop: Institutional inflows and increasing adoption continue to support the long-term bullish case for Bitcoin.
Trade Ideas
Long Setup – Buy the Dip
- Entry: Buy near the 50-day SMA.
- Target 1: $110,000 (resistance).
- Target 2: $120,000.
- Stop Loss: Below $88,000.
Outlook & Summary
- Short-term (1-2 weeks): Consolidation between $90,000-$100,000 is likely as the market digests the recent rally.
- Medium-term (1-3 months): A break above $110,000 would reignite bullish momentum, targeting the $120,000 level.
- Long-term (3+ months): The uptrend remains intact as long as prices stay above the 50-day SMA. Major support at $90,000 will be pivotal for maintaining the bullish outlook.
