Bitcoin set to rebound within downward channel

Bitcoin managed to rebound slightly in late November, raising hopes among bulls for breaking out of the current downtrend. However, the first day of winter shattered these plans. The price had lost over 5% by the end of yesterday’s session, plummeting as much as 8% intraday. Sellers are not ready to loosen their grip on the market, likely targeting the $80,000 level next. While the cryptocurrency is trading below its trendline, the risk of retesting the 2025 lows—just below $75,000—is rising rapidly.

A modest wave of growth at the end of fall helped to ease overheated conditions on the daily RSI chart, suggesting that BTCUSD has more room to decline. The Stochastic Oscillator issued a similar signal, with its lines crossing near overbought territory and increasing selling pressure. The death cross pattern formed in mid-November continues to favor bears, especially as the 50- and 200-day moving averages continue to diverge.

At the end of November, $3.5 to $4.6 billion flew out of Bitcoin ETFs. Monday’s drop forced investors to keep closing their long positions, adding $900 million to previous losses. Leveraged trades remain the primary vulnerability, as exiting them may cause an avalanche effect across the entire crypto market. Furthermore, holding such positions could soon become even less profitable.

Monday also delivered other significant news. The Bank of Japan (BoJ) reportedly received the government’s green light for a rate hike at its December 19 meeting. This move aims to support the yen, which is a favorite funding currency for investors, as servicing dollar-denominated debt is more expensive. However, if the BoJ tightens monetary conditions, the appeal of yen-denominated leverage will diminish, dealing a heavy blow to cryptocurrencies and other low-liquidity assets.

Take a look at the following trading plan:

Sell BTCUSD at the current price. Place a Take profit order at $80,000. Set Stop loss at $93,000.