Bitcoin Hovers Near $87,000 as Technical Indicators Signal Potential Market Bottom

Bitcoin Struggles to Break Key Resistance Levels

Bitcoin continues to trade near $87,000 as of Tuesday, struggling to maintain momentum above critical technical resistance levels ^[3]. The cryptocurrency has been range-bound between $85,000 and $90,000 for multiple weeks, with buyers pushing the price above the 20-day exponential moving average of $88,850 on Monday, though the long wick on the candlestick shows selling at higher levels ^[1].

Data from CoinMarketCap shows that Bitcoin has dropped more than 31% from its record high of $126,198.07 reached on Oct. 6, 2023, to trade at $87,101.47 as of 1:30 a.m. EST ^[5]. The cryptocurrency is currently below the monthly volume-weighted average price indicator, reinforcing a neutral-to-cautious bias ^[4].

Technical Signals Point to Potential Bottom

Several technical indicators suggest Bitcoin may be nearing a market bottom. As of December, Bitcoin's weekly Stochastic RSI had turned up from oversold levels, a setup that has historically appeared near key inflection points before price rebounds ^[2]. Similar bullish crosses emerged in early 2019 after BTC bottomed near $3,200, March 2020 during the COVID crash low near $3,800, and late 2022 around the $15,500 cycle low ^[2].

Additionally, Bitcoin's three-day chart is printing a bullish divergence where price made a lower low, but momentum did not ^[2]. This pattern also appeared ahead of the mid-2021 correction low and the FTX-driven bottom in 2022, both of which preceded multi-month recoveries ^[2].

Bitcoin's hashrate fell 4% in the month to Dec. 15, which VanEck analysts Matt Sigel and Patrick Bush viewed as "a bullish contrarian signal" linked to miner capitulation ^[2]. Since 2014, BTC posted positive 90-day returns 65% of the time following 30-day hashrate declines ^[2].

Record Options Expiry Could Unlock Volatility

A record options expiry event due Friday could provide the catalyst for increased price movement. Roughly 300,000 BTC option contracts, equivalent to $23.7 billion, alongside 446,000 IBIT option contracts, are set to expire ^[3]. The expiry constitutes over half of open interest on major exchange Deribit, with the "max pain" level at $95,000 ^[3].

"Historically, BTC has tended to experience 5 to 7% swings during the Christmas period, a pattern often linked to year-end options expiries rather than fresh fundamental catalysts," trading company QCP Capital commented in its latest market update ^[3].

Executive David Eng described the event as "acting like a lid" on BTC price upside earlier in the month, stating, "Before expiry, Bitcoin looks weak and boring. After expiry, structure changes" ^[3]. He gave $100,000 as an initial target following the expiry ^[3].

Network Activity and Liquidity Conditions Weaken

Despite stable prices, Bitcoin's network activity has shown signs of weakness. Data from CryptoQuant pointed to a slowdown in Bitcoin's network utility, with the 30-day moving average of active addresses dropping to roughly 807,000, the lowest level in the past year ^[4].

Exchange inflow value data highlighted how liquidity conditions have changed beneath stable prices. On Nov. 24, when Bitcoin traded near $88,500, seven-day cumulative inflows reached $21 billion on Coinbase and $15.3 billion on Binance ^[4].

Market Outlook for 2026

Bitcoin entrepreneur Anthony Pompliano noted that while Bitcoin hasn't reached predicted levels of $250,000 this year, "we haven't seen the big 80% drawdown that people normally expect as well" ^[5]. He added that Bitcoin's volatility has dropped substantially compared to previous years, making it "very surprising" if there is a "70% or 80% drawdown" during the first quarter of 2026 ^[5].

VanEck's head of multi-asset solutions David Schassler believes Bitcoin is "setting it up to be a top performer in 2026," noting that "Bitcoin is lagging the Nasdaq 100 Index by roughly 50% year-to-date" ^[5]. The analyst added that VanEck has "been buying" Bitcoin while its price is low ^[5].