Bitcoin enters the new week at a technical crossroads, with price action tightening beneath key EMA ribbons and sentiment split between two very different outcomes.
Traders are watching the $87,700 region closely, as holding this level would support a renewed breakout attempt, while a decisive drop below it could accelerate a deeper retracement.
EMA Ribbons Shape the Immediate Setup
The first chart from Merlijn The Trader highlights a familiar pattern: Bitcoin has tested the stacked EMA ribbons twice and failed each time. Now the price is pressing against those dynamic resistance bands again. Momentum has compressed steadily, forming a coiled structure that typically resolves in a sharp move.
If buyers continue defending the $87,700 support level, the market could force a breakout above the ribbons, opening the door to a push toward the mid-$90Ks and potentially reclaiming trend strength. Losing that support, however, would place Bitcoin back into vulnerability, with downside liquidity pockets ready to be filled.
Repeated Deep Pullbacks Are Still Part of the Larger Bull Structure
A second chart from Merlijn zooms out to the weekly timeframe, showing how Bitcoin’s current drawdown fits a recurring pattern. Every major leg of this cycle included brutal corrections before making fresh highs: a 22% dip, a 34% reset, and a 32% continuation correction all preceded impulsive rallies. The latest 36% decline continues that rhythm rather than breaking it.
The broader uptrend line remains intact, and price continues to react at historically significant levels. In Merlijn’s view, the structure still favors upside continuation once the current volatility resolves, even if the path forward remains uncomfortable in the short term.
Sentiment: Fearful on the Surface, Constructive Underneath
Short-term traders remain cautious due to repeated rejections at the EMA cluster, yet long-term market structure argues against panic. Throughout this cycle, Bitcoin has demonstrated the same behavior: it bleeds aggressively into support, shakes out leverage, and then launches into new territory.
The compression visible now shows neither exhaustion nor capitulation, only indecision. With macro catalysts approaching and liquidity conditions shifting, the environment is ripe for a strong directional move.
What Comes Next
Bitcoin sits just above a level that may define the remainder of December’s price action. A sustained hold above $87,700 should enable bulls to regain control and attack the EMA ribbons from a position of strength.
A breakdown, on the other hand, would place the market back into the 2025 support zone highlighted on the weekly chart. Either outcome is possible, but the charts suggest a resolution is close. Momentum is coiled, volatility is suppressed, and liquidity pools sit on both sides.
The market is ready to choose its direction, traders should be prepared for impact.
