Bitcoin correction risk increases: $80,000 support level faces testing, Nasdaq weakness becomes a key variable

After a three-week rally, Bitcoin’s short-term trend is beginning to show signs of fatigue. As the Nasdaq index faces resistance in its rebound, the overall market expectations for risk assets are changing, which also puts Bitcoin back under downward pressure.

Since touching a low of around $80,000 on November 21, Bitcoin’s price has rebounded to above $90,000, forming a reverse upward channel within the downtrend, with structure continuously raising highs and lows. Driven by factors such as the Federal Reserve’s rate cuts, a weakening dollar index, and improvements in some long-term technical indicators, the market once held expectations for a trend reversal.

However, in terms of actual performance, this rebound has not persisted. After reaching $93,000 last Friday, Bitcoin quickly retraced, with the weekend lows approaching $88,000, and currently oscillating around $89,600. The weekly candle closed with a long upper shadow, indicating significant selling pressure above $94,000, and high-position funds are taking profits. This is often seen as a sign of waning upward momentum.

External markets also signal a bearish outlook. The Nasdaq index fell nearly 2% last week, forming a typical “engulfing” pattern that swallowed the gains from the previous week. Meanwhile, the weekly MACD continues to weaken, suggesting that technology stocks may face further corrections in the short term. Given Bitcoin’s strong positive correlation with the Nasdaq, especially during US stock declines, Bitcoin often amplifies the downside, which is unfavorable for bulls.

Additionally, the US Treasury volatility index MOVE has raised market caution. After a sustained decline, it formed an inverted hammer pattern, often seen as a precursor to increased volatility. If Treasury market volatility intensifies, it generally indicates tightening global liquidity and pressure on risk assets. Historical trends show that Bitcoin often moves inversely to the MOVE index.

From key levels, Bitcoin is more likely to break below the current reverse channel to retest the $80,000 support level. If this zone is broken, market sentiment could weaken further. On the upside, only a clear breakthrough of the $94,000 to $95,000 range can re-establish a short-term bullish structure, while the $96,000 to $100,000 range still faces strong resistance from the 50-day moving average and the Ichimoku cloud. At this stage, risk management and the gains or losses of key support levels are the core focus of the market.