Bitcoin's recent price action has captured the attention of traders worldwide, as the cryptocurrency dips below key technical levels on the weekly chart. According to Bull Theory, Bitcoin has now closed below the weekly SMA50, a level that has historically supported every major pullback in this market cycle. This breach signals a potential shift into a broader correction phase, which aligns with the current market dynamics. Traders should closely monitor this development, as breaking such supports often leads to increased volatility and opportunities for strategic entries. With BTC trading around critical zones, understanding these support and resistance levels is essential for identifying potential reversal points and managing risk in cryptocurrency trading.

Key Technical Indicators Pointing to a Potential Bottom

Diving deeper into the technicals, the next major support for Bitcoin is identified at the weekly EMA100, hovering around $85,587. Since the third quarter of 2023, BTC has maintained closes above this level, with every recovery rally initiating from positions above it. This makes the EMA100 a pivotal area for bulls to defend. On the momentum side, the weekly RSI has reset to levels last seen in Q1 2023, when Bitcoin was trading near $20,000, indicating that market momentum has significantly cooled off. Similarly, the weekly MACD is flattening and entering its typical bottoming range, reminiscent of previous correction phases. These indicators suggest that while downside risks persist, the market may be approaching oversold conditions, potentially setting the stage for a rebound. For traders, this presents a scenario where monitoring RSI divergences and MACD crossovers could signal buying opportunities, especially if volume starts to pick up on dips.

Sentiment and Macro Factors Influencing BTC Price Movements

Market sentiment further reinforces the narrative of a possible local bottom. The Fear & Greed Index has lingered below 20 for a week, reflecting extreme fear among participants, while funding rates have flipped negative for the first time in nearly a month. According to Bull Theory, this positioning is typical near local bottoms, where excessive bearishness often precedes reversals as overly confident short sellers get squeezed. However, macro uncertainties add layers of complexity. Japan's elevated bond yields and the Federal Reserve's uncertainty regarding a December rate cut—with odds sitting at around 35%—could inject further volatility into the crypto markets. These factors highlight the interconnectedness of global finance and cryptocurrency, where traditional market signals can amplify BTC price swings. Traders should consider hedging strategies or scaling into positions gradually, keeping an eye on upcoming economic data releases that could sway Fed decisions and, consequently, Bitcoin's trajectory.

Overall, while a complete bottom isn't confirmed yet, the structural damage appears largely priced in, positioning Bitcoin either very close to or already within its local bottom zone based on technicals, sentiment, and positioning. For those engaged in BTC trading, this environment offers intriguing opportunities. Support at $85,587 could act as a strong base for accumulation, with resistance potentially forming around the recently broken SMA50. Volume analysis shows that trading activity often surges during such resets, providing clues for entry. On-chain metrics, such as increased whale accumulation during fear spikes, could further validate bullish setups. In the broader context, correlating this with stock market movements—where tech-heavy indices like the Nasdaq often mirror crypto sentiment—reveals cross-market trading plays. For instance, if AI-driven stocks rally on positive Fed signals, AI-related tokens might follow, boosting overall crypto flows. Institutional interest remains a key driver; reports of major funds eyeing BTC dips for long-term holds underscore the asset's resilience. As we approach year-end, traders are advised to watch for catalysts like ETF inflows or regulatory news that could propel BTC above $90,000, targeting previous highs. Risk management is crucial—set stop-losses below key supports and diversify across trading pairs like BTC/USD or BTC/ETH to mitigate volatility. This analysis emphasizes proactive trading: identify oversold conditions via RSI and MACD, align with sentiment shifts, and capitalize on macro resolutions for optimal entries. With Bitcoin's history of strong recoveries post-corrections, current levels may represent a compelling risk-reward setup for patient investors.