Bitcoin Drops Below $84K as Market Faces Critical Week Amid Bearish Sentiment

Bitcoin Faces Sharp Decline as December Opens

Bitcoin experienced significant selling pressure at the start of December, with BTC/USD dropping over 7% to reach $83,814 on Bitstamp ^[2], marking one of the steepest declines in recent weeks. The downturn came as US traders returned from the Thanksgiving holiday and encountered a market weighed down by multiple bearish factors.

"The selloff was triggered by a string of bearish developments across Asia," trading firm QCP Capital noted in its latest market update ^[2]. The firm pointed to several headwinds including Japan hiking interest rates, thin market liquidity, and concerns about potential selling pressure from corporate Bitcoin holders.

Critical Support Levels in Focus

Technical analysts are closely watching key support zones as Bitcoin struggles to maintain its footing. The cryptocurrency failed to break above its 20-day exponential moving average of $91,999 in recent days before turning down sharply ^[1].

If Bitcoin closes below $84,000, analysts expect the price could collapse to $80,600, with buyers anticipated to defend the zone between $80,600 and $73,777 ^[1]. However, a break below $73,777 could intensify selling and push Bitcoin as low as $54,000 ^[1].

Trader Killa outlined the immediate battleground: "Lets keep it simple. We need to hold above 85.2K. Lose that > structure remains in bearish territory" ^[2].

Bearish Technical Indicators Mount

Several technical indicators are signaling continued weakness. The Coinbase Premium, which measures price differences between Coinbase and other exchanges, has flipped negative after only three days of positive readings ^[2]. This shift suggests weakening demand from US institutional investors.

Additionally, veteran trader Peter Brandt indicated that Bitcoin's chart shows support in the sub-$70,000 to mid-$40,000 zone ^[1], suggesting substantial downside risk remains.

Network economist Timothy Peterson drew parallels to the 2022 bear market, noting that Bitcoin's current pattern shows a 98% correlation to the second half of 2022 ^[1]. If history repeats, Bitcoin may not see a sharp rally until well into Q1 2025 ^[1].

Glimmers of Hope Amid Uncertainty

Despite the bearish sentiment, some positive signals emerged. Crypto exchange-traded products attracted $1.07 billion in inflows last week, breaking a four-week losing streak according to CoinShares data ^[1]. This suggests institutional demand remains present at lower price levels.

Monday also marked the end of the US Federal Reserve's quantitative tightening program, potentially opening doors for capital inflows into risk assets ^[2].

Crypto analyst Michaël van de Poppe offered a contrarian view, describing Bitcoin trading below $90,000 as "a massive opportunity to be scooping cheap positions" ^[2]. He suggested that Bitcoin is forming a bottom formation, though he acknowledged this process "takes a bit of time before it's finalized" ^[2].

Pivotal Week Ahead

QCP Capital emphasized the critical nature of the coming trading sessions: "With US liquidity easing and macro headwinds from Asia intensifying, the next few sessions will be pivotal in determining whether BTC can end 2025 in the green" ^[2].

The firm noted that Bitcoin's "rapid adjustment to liquidity shifts remains a defining trait," highlighting the cryptocurrency's sensitivity to changing market conditions ^[2].

For bulls to regain control, Bitcoin will need to push and maintain prices above the 20-day EMA, which could enable a rally toward the 50-day simple moving average of $101,438 ^[1]. However, given current market dynamics and technical weakness, that recovery appears challenging in the near term.