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Bitcoin experienced a significant downturn on May 19th, shedding over 4.5% of its value and dropping to approximately $102,000. This marked its most substantial daily decline in over a month, fueled by broader risk-off sentiment in the market. Moody’s downgrade of the US government’s credit rating, citing rising budget deficits and a lack of fiscal consolidation, contributed to this negative market trend.
The price drop confirmed a bearish divergence, a technical indicator where price moves in one direction while momentum indicators suggest the opposite. This divergence, coupled with other technical factors, heightened concerns about a potential break below the crucial $100,000 support level. Prior to the sell-off, Bitcoin reached a new local high above $107,000, but its Relative Strength Index (RSI) formed a lower high, signaling weakening bullish momentum. This discrepancy between price and momentum often precedes trend reversals.
Analysts at Swissblock noted that Bitcoin’s attempt to break above the $104,000–$106,000 resistance range was unsuccessful, leading to a pullback into a high-volume zone. Immediate support between $101,500 and $102,500 is now under pressure. If this support fails, Swissblock projects a further decline to the $97,000–$98,500 range, based on historical on-chain volume and trading activity.
A three-day chart reveals the formation of a potential inverse head-and-shoulders pattern, a typically bullish formation. However, in this short-term context, it suggests a possible retest of the 50-period exponential moving average (EMA) near $91,000. This scenario is strengthened by Bitcoin’s failure to close above the $107,000 neckline, a level that triggered bearish reversals in December 2024 and January 2025. A rebound from the $91,000 level could potentially propel Bitcoin towards its previous high near $107,000, and potentially even higher. However, the current situation underscores the importance of exercising caution in the Bitcoin market.
