FameEX Hot Topics | These Key Support Levels Can Help Prevent Bitcoin’s ‘Bear Flag’ Drop to $88K

Bitcoin’s price, currently 13% below its $126,000 peak, faces a potential slide to $88,000 if critical support levels falter, according to traders. The daily chart shows a bear flag pattern, a bearish setup signaling further declines after a sharp drop. This pattern emerged following Bitcoin’s low of $103,530 on October 11, with the price now consolidating in an upward channel, repeatedly testing the flag’s support at $107,500. A daily close below this level would confirm the bearish continuation, targeting $88,100—a 19% loss—raising alarms among market participants wary of a deeper correction.

Technical indicators reinforce the bearish sentiment, with the relative strength index (RSI) at 42, indicating sustained downward pressure. A parallel bearish pattern on the four-hour chart suggests a nearer-term drop to $98,000, a level traders are watching for potential reversal signals. The bear flag’s formation follows a period of consolidation, with Bitcoin struggling to regain bullish momentum. This technical setup, combined with broader market dynamics, underscores the fragility of the current price structure and the importance of defending key supports to avoid a significant downturn.

On-chain data from Glassnode highlights additional risks, noting that Bitcoin has dipped below the short-term holders’ cost basis of $113,100. Historically, this has preceded mid-term bearish phases, as weaker holders capitulate, intensifying selling pressure. Glassnode’s Supply Quantiles Cost Basis Model stresses the need to hold above the 0.85 quantile at $108,600 to avert further sell-offs. Failure to maintain this level often signals structural weakness, potentially pushing prices toward the 0.75 quantile near $97,500, aligning with the four-hour chart’s target and amplifying concerns about a deeper correction.

Crypto analyst Daan Crypto Trades emphasized the $111,000 level as critical for short-term price action. In a Thursday X post, the analyst noted that breaking above this level could spark a bullish shift, targeting higher prices. Daan also praised the resilience of the $107,000 support, which has held firm despite broader market weakness, including stock market declines. This level’s defense is vital to prevent a drop toward the psychological $100,000 mark, which could further erode investor confidence.

Bitcoin is at a pivotal moment, with the $107,000 support level determining its near-term path. A close below this threshold would validate the bear flag, potentially driving prices to $88,100 or $97,500, as indicated by technical and on-chain analyses. Conversely, surpassing $111,000 could signal a recovery. Traders are adopting cautious strategies, using key price levels for risk management as they navigate this consolidation phase, with the outcome hinging on whether Bitcoin can hold these supports or face a deeper bearish trend.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.