Bitcoin has returned to this week’s low of $85,500 after suffering the dreaded “Bart Simpson pattern” early Wednesday in which the price rose rapidly, flattened for several minutes, and then just as quickly returned to its previous spot. The resulting shape on the chart will resemble the head of a famous cartoon character.
Once again, the crypto market seems to be stuck in an awkward scenario where there is no correlation at all with stock prices when they are trending up, but a one-to-one correlation with stock prices when things go down.
In fact, this morning’s rally collapsed along with the Nasdaq, which began to fall as enthusiasm for artificial intelligence trading further waned. About 90 minutes before the close, the tech stock index was down 1.5%, led by a large decline in much of the chip sector.
But perhaps more frustrating for crypto bulls is the precious metal’s continued steep upward trajectory. Silver rose another 5% to a new record, while gold rose 1%, just shy of its all-time high. There was a time when Bitcoin enthusiasts expected BTC to be the asset of choice as a safe haven when the Fed eased monetary policy or when stock prices were in crisis. Instead, gold, silver, and even bronze won the bid.
This week’s scoreboard for cryptocurrencies is not pretty. Bitcoin fell 8%, Ether 15%, and Solana and XRP 12%.
where is the floor?
Jasper de Meere, desk strategist at Wintermute, said Bitcoin is likely to remain in the $86,000 to $92,000 range. He added that the current consolidation range is volatile, so today’s sudden price movement as traders struggle to liquidate is not that unusual.
Demere cautioned against reading too much into technical indicators at this point, saying he expects profit-taking to increase over the next two weeks due to year-end portfolio adjustments and tax considerations. “People are exiting positions to take a breather…Short-term bull markets are quickly sold off.”
He expects Bitcoin to continue sideways until new catalysts are found, one of which is likely the expiration of large options in late December.
Demere said the market is starting to show signs of a bottom, although it hasn’t signaled a bottom yet. “I feel like the pain is at its max,” he said. “I think it’s definitely oversold in the short term.”
