Bitcoin price forms inverse cup and handle pattern as $160M in liquidations spook bulls

Bitcoin price has been experiencing volatility for over a month, which has led to the formation of a bearish inverse cup and handle pattern. This comes as liquidation spikes continue to sideline buyers.

According to data from crypto.news, Bitcoin (BTC) price went up from $86,000 to an intraday high of $90,165 on Wednesday before settling at $86,612 at the time of writing. The world’s largest crypto asset by market cap has been seesawing between the $82,000–$95,000 range for over a month, with no clear direction. At press time, BTC remains 31.3% below its all-time high set in October this year.

Bitcoin price has remained under pressure due to massive liquidation events across the crypto market, which has kept investor appetite at bay. Derivative traders have largely been cautious ever since the $19 billion in liquidations seen by the crypto market on Oct. 10, triggered by a sudden escalation in U.S.–China tariffs. 

The announcement resulted in liquidations of highly leveraged traders, which quickly spiraled into cascading liquidations as forced sell orders pushed prices lower, hitting successive waves of stop-losses and margin calls.

Data from Coinglass reveals that in the past 24 hours alone, the crypto market saw over $540 million in liquidations, with Bitcoin accounting for approximately $160 million of the total.

Investor confidence in Bitcoin also weakened as institutional demand for Bitcoin kept waning over the past weeks. Data from SoSoValue show that U.S. BTC ETFs have so far managed to record only $21.36 million in net inflows in December, following nearly $3.5 billion in outflows in November, a stark contrast to the prior two months when they recorded nearly $3.5 billion in inflows each.

A more recent bearish catalyst came from the Fed’s rate cut on Dec. 10, where the Fed Chair took a cautious tone, hinting at fewer rate cuts as we move into 2026. Cryptocurrencies, including Bitcoin, tend to lose momentum when the Fed delays rate cuts.

Furthermore, losses in artificial intelligence-linked stocks such as Nvidia and Broadcom over the past few days have dragged the Nasdaq lower, adding another layer of risk-off sentiment across risk assets. 

At press time, the Crypto Fear and Greed Index indicated a persistent “Extreme Fear” sentiment prevailing in the broader crypto market. 

On the daily chart, Bitcoin has been forming an inverse cup and handle since mid-April this year. 

The structure formed as the asset’s price rose and then gradually declined in a rounded shape, followed by a temporary bounce that failed to reclaim previous highs. It is typically a precursor to a bearish continuation, signaling potential downturn ahead if the pattern breaks below the neckline of the formation.

Simultaneously, Bitcoin price has moved below all the major moving averages, with the shorter-term ones now trading beneath the longer-term averages, a telltale sign of growing bearish momentum in the market.

In addition, the Aroon indicator shows the Aroon Down at 78.5%, while the Aroon Up is at 35.7%, another signal that bears are currently in control of the trend.

Hence, Bitcoin price stands at risk of dropping to its April low of $76,400, down 11.7% from the current price. 

However, a decisive break back above the $94,000-$95,000 resistance zone in the coming weeks would invalidate this bearish outlook and potentially signal a renewed bullish phase.