Traders in Trouble: Bitcoin returns to week's lows below $86,000

Bitcoin fell below$86,000 returning to weekly lows, characterized by a sharp drop from recent highs reflecting a broader risk for traders.

Bitcoin has returned to its week low of $85,500 after revealing the infamous "Bart Simpson pattern" earlier on Wednesday, in which the price suddenly rises, flattens out for a few minutes, and then falls back to its original level. The crypto market looks to be caught in the difficulty of being completely uncorrelated with fairness while they are rising, but having a 1:1 connection with stocks when things are down.

Bitcoin's Early Rally Wednesday already feels like a distant memory, as the price has returned to the week's lows. This rapid flow collapsed along with the Nasdaq, which began to fall as interest in the artificial intelligence trade fell even further. The tech-heavy index is down 1.5% about 90 minutes before the close, with parts of the semiconductor sector falling significantly more sharply.

Perhaps more disappointing for crypto bulls is the ongoing rapid upward trend in precious metals, with silver rising another 5% to set a new record and gold up 1% and just shy of an all-time high. Bitcoiners used to expect BTC to be the asset of choice when the Fed loosened monetary policy or as a flight to safety when markets were struggling. Instead, gold, silver, and even copper are capturing that bid. Considering the fact that, Bitcoin is lower by 8%, ether by 15%, and solana and XRP by 12% doesn’t make crypto’s scoreboard of the week look well.

According to Jasper De Maere, desk strategist at Wintermute, Bitcoin is likely to be stuck in the range between $86,000 and $92,000. He added that today's sudden price movements aren't that out of the ordinary as traders suffer liquidations as the current consolidation range is experiencing high volatility.

De Maere warned against expecting more profit-taking over the next two weeks followed by year-end portfolio adjustments and tax considerations, he also cautioned reading too much into technical indicators at the moment. He expects bitcoin's sideways movements to continue until fresh catalysts emerge, one of which might be huge options expirations in late December.