Bitcoin Dips Below $88,000 but Recovers from $86,700 Support — Key Resistance at $89,000

Bitcoin trimmed gains and dropped below $88,000 before bulls stepped in at the $86,700 support level, prompting a recovery attempt that pushed price back above $88,000 and the 100 hourly Simple Moving Average. The hourly chart shows a break above a declining channel with resistance around $87,300 and a move past the 50% Fib retracement of the recent sell-off from the swing high of $90,298 to the low at $86,700. Data referenced from Company Kraken.

Immediate technical setup: If Bitcoin stays above $87,500, the path for an upside recovery remains intact. Near-term resistance is at $88,500, with the first major barrier at about $88,900 (the 61.8% Fib retracement). A sustained move above $89,500 could open a run toward $90,200 and possibly test $90,500 and then the psychological hurdles of $91,200–$91,500. Conversely, failure to reclaim and hold above the $89,000 zone could lead to another leg down.

Downside scenario: Immediate support is noted near $87,850, with the first major support at $87,500, followed by the recent swing low at $86,700. A deeper drop could target $85,500, with the critical long-term support near $85,000. A decisive break below $85,000 would likely accelerate selling pressure and could trigger broader market weakness.

Indicators and momentum: Hourly MACD is gaining pace in the bullish zone and the hourly RSI has climbed above the midpoint (50), suggesting the short-term momentum favors buyers, provided the price holds key support levels. Traders should watch the interplay between the 100 hourly SMA and the pivot-of-interest at $87,500 for cues on trend continuation.

Trading implications and strategy: For momentum traders, a confirmed close above $89,500 with volume would be a constructive signal for a push toward $90,200–$90,500. Swing traders should consider tight risk controls beneath the $87,500 support; stops below $86,700 or $85,500 depending on risk tolerance. Short-biased setups would need a failure to reclaim $89,000 and a break below $87,500 to confirm further downside. Manage position sizing carefully: volatility near these levels can lead to rapid moves and intraday whipsaws.

Context and market nuance: This move remains within a broader range between the recent highs near $90,298 and the supports at $86,700–$85,000. Breakouts above the 61.8% Fib level or breakdowns under the major supports will likely dictate the next directional leg. Keep monitoring volume and cross-market cues, including derivatives funding rates and altcoin breadth, for additional conviction.

Conclusion: Bitcoin's short-term outlook is cautiously optimistic while it remains above the $87,500 pivot. A clear close above $89,500 would favor further upside toward the low $90k area, while failure to defend $87,500 risks a slide back to the mid-$80k zone. Traders should watch the 100 hourly SMA, MACD and RSI readings for confirming signals and place protective risk controls accordingly.