Bitcoin took a notable hit on May 19, as its value plummeted over 4.5%, rattling investors who had been riding high on the recent bull run. The digital currency’s tumble to approximately $102,000 marks its most significant daily decline in more than a month, stirring anxiety among traders and analysts alike. This downturn comes amidst unsettling economic signals, including a downgrade of the U.S. government’s credit rating by Moody’s, which cited a growing budget deficit and an absence of a credible fiscal consolidation strategy.
Bitcoin’s Bearish Signals
Bitcoin’s latest price action has analysts waving cautionary flags. On May 19, the cryptocurrency scaled a new local peak above $107,000, only to see its relative strength index (RSI) register a lower high—a classic bearish divergence. This divergence, where price and momentum fail to move in tandem, often heralds a market reversal. Analyst Bluntz advised traders to “be careful with [placing] longs,” hinting at potential volatility ahead.
The rejection from the $104,000–$106,000 resistance level was particularly telling. Swissblock analysts noted that Bitcoin “grabbed liquidity” in this range but couldn’t maintain a breakout, which led to a retreat into a dense trading zone. The immediate support, now under strain, lies between $101,500 and $102,500. Should this support buckle, attention turns to the $97,000–$98,500 range, identified by Swissblock as a critical downside target based on historical onchain volume and trading activity. This aligns with concerns voiced in Bitcoin Surpasses $95K Amid Resilient U.S. Stocks, Analysts Voice Concerns Over Market Perception, where market perception was highlighted as a key factor influencing Bitcoin’s price movements.
A Possible Inverse Head-and-Shoulders Pattern
Adding another layer of complexity to Bitcoin’s current predicament is the potential formation of an inverse head-and-shoulders pattern on the three-day chart. While such patterns are typically bullish in the grand scheme, they often suggest interim turbulence. In this case, the pattern hints at a short-term dip to around $91,000, aligning with the 50-period exponential moving average (EMA).
The failure to close above the pivotal $107,000 neckline—a level that has previously triggered bearish reversals in December 2024 and January 2025—has increased the likelihood of this scenario playing out. However, a rebound from the $91,000 region towards the neckline could potentially set the stage for Bitcoin to aim for a lofty $150,000, according to some market watchers. This scenario echoes the seasonal patterns discussed in Bitcoin Traders Brace for ‘Sell in May and Go Away’ as Seasonality Favors Bears, where historical trends suggest a bearish outlook during this period.
Market Context and Future Implications
The crypto market’s recent turbulence isn’t happening in a vacuum. External economic pressures, like Moody’s downgrade of the U.S. government, have compounded the uncertainty. This downgrade reflects broader fiscal challenges, raising questions about the resilience of not just Bitcoin, but risk assets in general.
As the market digests these developments, the $97,000–$98,500 support zone becomes a focal point. Analysts will be closely watching how Bitcoin navigates this critical juncture. With the potential for a deeper dive to $91,000, traders are urged to brace for possible volatility, keeping a keen eye on onchain metrics and global economic indicators that could sway sentiment.
In the coming weeks, investors will be scrutinizing Bitcoin’s ability to hold its ground. Will it stabilize above $100,000, or will further declines test the resolve of its bullish supporters? These are the pressing questions that loom large as the crypto community assesses its next steps in this ever-evolving landscape.
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This article is based on: Bitcoin bulls should 'be careful with longs' as BTC price risks $100K breakdown
Further Reading
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- Bitcoin Surges Past $94,000 as Institutional Interest and Market Optimism Grow
- Stagflationary Data Puts Pressure on Bitcoin, Stocks
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
