As BTC prices continue to fall after the Fed, this key contrarian indicator offers new hope

Bitcoin (BTC) price’s post-Fed drop to $96,000 has activated a crucial opposite indicator that historically marks the end of price declines.

On Wednesday, the Fed cut its benchmark borrowing cost as expected, but forecast only two rate cuts for 2025, down from four cuts expected in September. The central bank stressed that it is not interested in participating in a potential government plan to build a strategic reserve of Bitcoin.

Since then, Bitcoin has fallen more than 8%, hitting lows near $96,000 at one point. As of writing, the cryptocurrency is trading near $97,500, down about 10% from the record high of $108,266 reached early this week, according to CoinDesk data.

The losses caused the 50-hourly simple moving average (SMA) to fall below the 200-hourly SMA, confirming a bearish crossover. The pattern suggests that a sustained pullback could develop into a deeper pullback, although it has failed to live up to its reputation during the recent uptrend.

Bitcoin saw some declines during its post-US election rally from $70,000 to over $100,000, and each of these declines ended with a bearish crossover between the 50 and 200 hourly simple moving averages.

The recent crossover thus provides hope for bulls anticipating a renewed move to six figures above $100,000.

A potential rebound may encounter resistance near $106,000, the level set by the downtrend line, which marks the recent decline in prices. A violation there would open the doors to record levels.

It is important to remember that patterns do not always work as expected, and the opposite indicator discussed above may fail, which could lead to a deeper decline. The first sign of trouble would be if prices move below the overnight low of $96,000, which could expose the swing low at around $91,000 recorded on December 5.