Bitcoin Weekly Outlook: Be Prepared For Another Sharp BTC Price Dip

Bitcoin (BTC) saw its first bad week since Donald Trump’s win in the November US presidential election, dropping by over 8.50% despite establishing a new record high of $108,230 in the same bearish period.

The pullback occurred largely due to the Federal Reserve’s hawkish interest rate outlook for 2025 on Dec. 18. As expected, the US central bank slashed rates by 25 basis points (bps) to a new range of 4.25-4.50%. For 2025, the updated SEP report hints at 50 bps of cuts, less than what the Fed communicated in September (50 bp of cuts vs. 100 bp prior).

However, Dec. 20’s cooler-than-expected Personal Consumption Expenditures (PCE) report, coupled with a relatively dovish commentary from Fed President Austan Goolsbee, boosted risk appetite and helped Bitcoin recover a bit.

The recovery has stalled this week, with a mix of fundamental, technical, and on-chain indicators further indicating a bearish continuation in the Bitcoin market next. Let’s examine these outlooks below.

Bitcoin Technical Analysis: Another BTC Price Dip Toward $89,000 Likely

Bitcoin’s price action suggests potential for further downside, with technical indicators pointing toward a likely retest of $89,000 in the coming sessions.

Currently trading near $93,640, Bitcoin has pulled back from its recent high of $108,755. This decline coincides with a bearish divergence on the Relative Strength Index (RSI), where the indicator has formed lower highs despite Bitcoin’s price reaching higher peaks. The pattern often signals weakening momentum and increases the probability of downward movement.

The Fibonacci retracement levels on the three-day BTC/USD chart reveal $89,000 as the 0.236 level, a critical support zone. Additional support levels can be identified at $76,930 (0.382 Fibonacci level) and $67,100 (0.5 Fibonacci level), providing potential areas for a price rebound if the $89,000 support fails.

The 76,390 support target aligns with the 50-3D exponential moving average (50-3D EMA; the red wave).

Global Money Supply Threatens $20K Reduction Off Bitcoin Price

A strong lagging correlation between Bitcoin and the global money supply, M2, could further influence crypto traders to cap their risk appetite in the coming weeks.

The chart below, presented by trading resource The Kobeissi Letter, shows that Bitcoin prices typically lag behind global M2 money supply changes by approximately ten weeks. This relationship appears consistent with Bitcoin’s peak of $108,000 in October, which coincided with the global M2 money supply reaching a record $108.5 trillion.

However, global M2 has since declined by $4.1 trillion, falling to $104.4 trillion, its lowest level since August 2024. Bitcoin could be poised for a significant price correction if this pattern persists, with data suggesting a potential decline of up to $20,000 in Bitcoin’s value in the coming weeks.

Bitcoin On-Chain Data Suggests Price Below $80,000

Bitcoin’s current price action is approaching critical support levels defined by the realized price of short-term holders (STH), signaling key zones where strong buying interest could emerge. These levels, calculated as the average purchase price of short-term investors, often serve as reliable indicators of market sentiment and support during downturns.

The first key level is the 1-week to 1-month STH realized price at $98,705, which sits slightly above the current trading price. While this level may act as a near-term resistance if Bitcoin recovers, it is unlikely to be a strong support in the event of a downturn.

A more significant support zone lies at the 1-month to 3-month STH realized price of $77,792. However, the deepest support is found at the 3-month to 6-month STH realized price of $60,501.

This level reflects heavy accumulation by investors earlier in the year and could act as the strongest safety net in the event of prolonged bearish momentum or unexpected market shocks.