Key Takeaways
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Bitcoin retreated below $95,000 on Sunday over concerns about the potential impacts of the tariffs announced by the Trump administration on Canada, Mexico and China.
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The cryptocurrency's price has carved out two peaks around the same level between December and January, potentially forming a double top, a classic chart pattern that signals a downside reversal.
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Investors should monitor crucial support levels on bitcoin's chart around $92,000, $87,000, and $74,000, while also monitoring a key overhead area near $106,000.
Bitcoin (BTCUSD) retreated below $95,000 on Sunday over concerns about the potential impacts of U.S. tariffs imposed on products coming from Canada, Mexico and China.
The steep drop in the price of bitcoin follows President Donald Trump’s announcement on Saturday that the U.S. will impose 25% tariffs on Mexican and most Canadian imports, and 10% on all goods from China, starting on Tuesday. Investors see tariffs as inflationary, which could keep the Fed from cutting rates this year, thereby putting downward pressure on non-interest-bearing assets like bitcoin.
Since setting its record high last month, bitcoin has slumped about 15%, with the cryptocurrency logging its third consecutive down day on Sunday and hitting a three-week low. However, it still trades 35% higher since the early-November U.S. election on expectations of a possible strategic bitcoin reserve and a more favorable regulatory outlook under a crypto-friendly White house and Congress.
Below, we take a closer look at bitcoin’s chart and apply technical analysis to identify crucial price levels to watch out for.
Potential Double Top
Bitcoin’s price has carved out two peaks around the same level between December and January, potentially forming a double top, a classic chart pattern that signals a downside reversal.
Furthermore, as the cryptocurrency made a slightly higher high last month, the relative strength index (RSI) made a relatively shallower peak to create a bearish divergence between the price and indicator, pointing to waning buying momentum.
Let’s identify three crucial levels where bitcoin’s price may attract support and also point out a key overhead area to watch during possible upswings.
Crucial Support Levels to Monitor
The first level to monitor sits around $92,000. This area provides a confluence of support from an uptrend line stretching back to last year’s September low and a range of similar price points on the chart between November and January. The price fell below this key level late on Sunday, but has since reclaimed the area.