A Flush or a Setup? Bitcoin’s Drop After PCE Looks More Like Positioning Than Trend
BTC dips on macro noise, but heatmaps, dollar signals and wave structure all point to one more push higher before a broader reversal.
🪙 Crypto Market Overview
Bitcoin slipped after yesterday’s PCE inflation release, though the decline appears more like a market-maker flush and options-related positioning move than a true shift in trend. Price action lacked conviction and behaved consistently with a liquidation hunt rather than fundamental weakness.
Many traders had anticipated a sustained breakdown in the U.S. Dollar Index this week after it slipped below its multi-month range. Instead, the dollar failed to follow through and is now retesting the week’s breakout zone. This hesitation kept crypto from extending upside — but next week still holds potential for renewed dollar softness, which may give BTC another window higher.
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⚙️ Technical Picture
Large downside liquidation zones were the main driver of yesterday’s drop, while upside pockets remained relatively empty. Heatmaps comparing yesterday and today make this clear: the flush absorbed liquidity, but didn’t erase the possibility of a renewed push.
Shorts that entered near 96,000 USD stand out on high-frequency positioning maps. These pockets often act as magnets, making 96K a logical upside target for next week if momentum stabilizes.
A compelling wave structure also supports a final extension higher. Although wave analysis is subjective, the current count suggests a fifth wave may be forming — one that could easily overshoot expectations and stretch into the 98,000 USD region before exhaustion.
USDT Dominance, meanwhile, has yet to complete its ideal retest and divergence reset. This reinforces the pattern: a temporary push higher in BTC, then a more meaningful pullback into year-end.
📊 On-Chain & Market Flow
Our model continues to decline but is doing so more slowly, which aligns well with the “one final push higher” scenario. Conditions remain broadly cautious — the model hasn’t exited its weakest zone yet — so Bitcoin is not out of danger.
The multi-day version of the model remains firmly bearish. If BTC manages to rally into the high-90Ks next week while multi-day signals stay negative, that would strongly hint that the move is a blow-off rather than a breakout.
In short:
• Short-term: room for an upside squeeze.
• Medium-term: caution into late December.
• Longer-term: cycle remains intact, but near-term exhaustion risk is high.
💬 Final Thoughts
Traders expecting an immediate rollover may be caught off-guard. The structure supports one more push higher — potentially into 96K–98K — before the larger trend resumes. Heatmaps, leveraged positioning, wave counts, and USD dominance all point in the same direction: temporary strength, then renewed weakness.
The coming week will be decisive.
🎯 Strategy Outlook
Short-Term — Pending
Waiting for the high-quality short setup discussed above.
Medium-Term — Long
Bias remains cautiously constructive until the expected blow-off completes, though patience is essential.
Long-Term — Long
Preparing to exit next week if price confirms exhaustion.
Entry: 79,000 USD
Stop: 65,000 USD
Target: 180,000 USD