FameEX Hot Topics | These Key Support Levels Can Help Bitcoin Avoid a ‘Bear Flag’ Crash to $88K

Bitcoin is currently trading at a 13% discount from its all-time high of $126,000, raising concerns among traders who warn that a failure to maintain key support levels could drive the price down to $88,000 in the coming days. The cryptocurrency is displaying a bearish pattern on the daily chart, specifically a textbook bear flag, which signals a potential continuation of the recent downward trend. This pattern formed after Bitcoin hit a low of $103,530 on October 11, with the price now consolidating in an upward parallel channel. The flag’s support line, currently at $107,500, is under constant pressure, and a daily close below this level could confirm the bearish setup, potentially leading to significant losses.

The bear flag pattern on the daily chart indicates a measured target of $88,100, which would translate to a 19% decline from current levels if validated. Momentum indicators bolster this bearish outlook, with the relative strength index (RSI) sitting at 42, suggesting that selling pressure remains dominant. Additionally, a similar bearish pattern on the four-hour chart points to a nearer-term target of $98,000, a level traders are closely monitoring for potential reversal signals. The combination of these technical patterns underscores the precarious state of Bitcoin’s price action, as the market teeters on the edge of a deeper correction or a possible stabilization.

On-chain data from Glassnode further highlights the risks, noting that Bitcoin has fallen below the short-term holders’ cost basis of $113,100. Historically, this breach has signaled the start of a mid-term bearish phase, as weaker hands begin to capitulate, exacerbating selling pressure. Glassnode’s Supply Quantiles Cost Basis Model emphasizes the importance of holding above the 0.85 quantile at $108,600 to prevent another wave of sell-offs. Failure to defend this level has often led to structural market weakness, with deeper corrections toward the 0.75 quantile, currently near $97,500, aligning closely with the four-hour chart’s bearish target.

Crypto analyst Daan Crypto Trades has pinpointed $111,000 as a critical short-term level. In a Thursday post on X, the analyst noted that breaking and holding above this point could pave the way for a bullish reversal, targeting higher price levels. However, Daan emphasized the resilience of the $107,000 support, which has withstood recent market weakness, including pressures from declining stock markets. This level remains pivotal, as its defense is crucial to preventing a slide toward the psychological $100,000 mark or lower.

Bitcoin stands at a critical crossroads, with the $107,000 support level serving as the linchpin for its near-term trajectory. A daily close below this threshold would validate the bear flag, potentially driving prices toward $88,100 or even $97,500, as suggested by technical and on-chain analyses. Conversely, reclaiming $111,000 could signal a shift toward bullish momentum. Traders are adopting defensive strategies, closely watching these levels to navigate the ongoing consolidation and determine whether Bitcoin can avert a deeper bearish phase or succumb to further declines.

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