Bitcoin Briefly Dips Below $100K Amid Fed's Hawkish Comments, Forming Potential Bearish Pattern on Weekly Chart

Bitcoin has experienced a temporary dip below the key psychological $100,000 mark, following hawkish remarks from the U.S. Federal Reserve. The cryptocurrency briefly slipped under six figures, touching a low of $99,047 on Dec. 19 before reclaiming the $100,000 level. This market movement has sparked concerns from some analysts, with one suggesting the formation of a bearish pattern on the weekly chart.
Bearish Engulfing Pattern in the Making?
Pseudonymous crypto analyst Rekt Capital alerted their 518,900 followers on X (formerly Twitter) to a developing “bearish engulfing” candlestick pattern on Bitcoin’s weekly chart. According to Rekt, while the pattern has not been confirmed yet, it could signal a potential downtrend if the current candle fully engulfs the previous one. The analyst emphasized that there are still a few days left in the week to confirm the formation, and as such, the situation is fluid, with “lots can change in the meantime.”
Rekt added that Bitcoin's price could still recover if it maintains key weekly support levels. "Technically, this is still just a dip until Weekly levels are confirmed as lost,” they explained.
Fed's Hawkish Comments Triggered Market Volatility
Bitcoin’s brief dip below $100,000 occurred in the early hours of Dec. 19, following a broader sell-off in the crypto market. This drop came in the wake of the U.S. Federal Reserve’s announcement of a 25-basis-point rate cut. The Fed also signaled that fewer rate cuts may take place in 2025 than initially expected, adding to investor uncertainty. The crypto market, which has closely followed macroeconomic trends in recent months, saw a sharp pullback in response to these remarks.
A Normal Pullback, Say Some Traders
Despite the recent dip, many in the crypto community are not overly concerned. Bitcoin Archive, a prominent crypto account, noted in a Dec. 18 post that this pullback is not unusual, especially given that Bitcoin has experienced similar dips since October. “We’ve had 8 of them since October,” they pointed out, highlighting that such corrections are a normal part of Bitcoin’s price behavior.
Crypto commentator James Lavish also weighed in, saying, “If you’re selling your Bitcoin in reaction to what the Fed said today, you have no idea what you own,” reinforcing the view that short-term fluctuations are not a cause for panic among long-term holders.
Price Discovery Phase and Historical Volatility
Bitcoin’s price volatility has been especially pronounced since it broke through $100,000 for the first time on Dec. 5. This milestone was driven by factors such as the launch of Bitcoin exchange-traded funds (ETFs), anticipation surrounding the upcoming April halving, and broader market sentiment linked to political events like Donald Trump’s election win. However, Rekt cautioned that Bitcoin is still in a phase of “Price Discovery,” having surpassed its previous all-time high of $73,679 set in March.
According to Rekt, this phase of price discovery typically involves increased volatility and occasional corrections. "Technically, it is Week 7 in Price Discovery, which historically meant that BTC corrections occur around this time,” Rekt said. The analyst noted that such corrections tend to take place in Weeks 7 and 8 of the Price Discovery cycle, and the ongoing dip may last for at least another week.
Looking Ahead
While many crypto traders are accustomed to Bitcoin’s volatile nature, the current market movement warrants close observation. The bearish engulfing pattern, if confirmed, could signal a short-term downturn for the leading cryptocurrency. However, as Rekt Capital pointed out, much can still change in the coming days, and the market may yet see a reversal.
As the week progresses, all eyes will be on Bitcoin’s ability to maintain support at the $100,000 level and whether the broader market can weather the impact of recent Federal Reserve decisions. For now, traders remain divided, with some viewing the dip as a routine pullback, while others brace for potential further corrections in the weeks to come.
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