16 Oct 2025
Bitcoin is experiencing a significant rejection from a crucial resistance level, exacerbated by escalating geopolitical tensions between Russia and NATO, which triggered a quick and violent market sell-off. This market downturn also sees Bitcoin dominance rising, negatively impacting altcoins like Ethereum, Solana, and XRP, all retesting vital support areas on their respective price charts.
Recent breaking news regarding potential escalations between Russia and NATO, including European diplomats warning Russia about NATO's readiness to engage violating aircraft and Russia's foreign minister declaring 'head war,' caused a swift and violent sell-off across the Bitcoin and crypto markets. This geopolitical tension is identified as a primary reason for the latest market drop.
The Super Trending indicator for Bitcoin on the weekly timeframe remains green, suggesting a larger bull market, yet a massive bearish divergence is still active and playing out. This divergence, first warned about in July, indicates an expected larger cool-off, slowdown, and a lack of bullish momentum over several months, which has been unfolding as predicted.
On the 3-day Bitcoin chart, the market is moving further away from a possible bullish crossover in the MACD indicator and is now picking up a small amount of bearish momentum, although no significant momentum in either direction is currently observed.
Bitcoin continues to face strong rejection from the major resistance level around $117,000, and a recent attempt to break out and retest the $113,000 - $112,000 level failed to confirm a daily candle close above it. This rejection pushed the price towards the next major support area between $106,700 to $107,600, with potential new resistance forming around $110,000 to $111,000.
Breaking below $114,500 significantly altered Bitcoin's price structure, initiating a new short-term bearish trend. A recent short-term bullish divergence confirmed and played out but was shorter than expected, serving as a temporary bullish move within the larger bearish trend rather than a trend reversal.
The 4-hour Bitcoin RSI is re-entering oversold territory, suggesting the price is likely to stabilize in the immediate short term (next few hours to one day), potentially leading to sideways consolidation or a slight bounce. A higher low in the 4-hour RSI, coupled with a lower low in price, is forming a new possible bullish divergence, which if confirmed by an RSI bounce, could lead to a short-term bullish relief over the next one to two days.
A Bitcoin long position was exited with slight profits due to effective risk management, specifically using a stop-loss at break-even or in profits, which is crucial for avoiding losses. Re-entry into a Bitcoin long position is being considered only if the new potential bullish divergence on the 4-hour chart is confirmed by an RSI bounce in the coming hours or day.
Recent price drops wiped out many long positions, particularly around $111,000. Currently, there is not much liquidity immediately below or above Bitcoin's current price, except for a decent amount towards $118,000, which is still a considerable distance from the current price.
Bitcoin and crypto funding rates are relatively neutral, even after the recent drop, suggesting the sell-off was primarily driven by the spot market (whales dumping or panic selling) rather than leveraged futures. Neutral funding rates imply the market is currently balanced between spot and futures, supporting the expectation of short-term price stabilization.
Bitcoin dominance is experiencing a short-term bullish relief, which generally indicates most altcoins will underperform Bitcoin. This effect is amplified during a Bitcoin downturn, causing altcoins to drop significantly further than Bitcoin, posing a challenge for the broader altcoin market.
Ethereum is critically retesting an important support area between $3,900 and $4,100, which previously acted as massive resistance. A confirmed daily, 3-day, or weekly candle close below $3,900, especially if failing to reclaim it as support, would signify a major bearish price structure, potentially leading to a drop towards $3,400-$3,500 and possibly even $2,800. Short-term resistance is expected between $4,060 and $4,100.
Solana is retesting and currently holding a crucial support area between $190 and $200. This area is vital for maintaining the larger bullish trend; a confirmed break below $190 and failure to recover would signal a significant shift to a larger bearish trend over weeks or months. A massive bearish divergence on the 12-hour timeframe, active since higher prices, indicates expected weakness or continued pullback, though the 12-hour RSI hitting oversold suggests short-term stabilization is likely around this support.
XRP is testing a very important support area between $2.70 and $2.80, which has historically led to multiple major bounces. Failure to hold this support with a daily candle close below $2.70, especially if it flips to resistance, would confirm a bearish price structure and could lead to drops towards $2.40-$2.50 or even the lower $2 range. A massive weekly bearish divergence, warned about for months, continues to play out, indicating a larger cool-off. Resistance levels are noted at $3.00, $3.10-$3.15, and $3.30-$3.35.
Chainlink is continuing its confirmed larger bearish trend after breaking below $22, targeting the next major support between $19 and $20. If this support fails, a move towards $17.50, and potentially $15.20-$15.70, is expected. Resistance is anticipated around $22 to $22.30.
Bearish price action presents opportunities to profit through short positions or by waiting for better buying opportunities to accumulate Bitcoin or crypto at cheaper prices, demonstrating that market downturns are not necessarily negative.
Traders are advised to be prepared with a crypto exchange for upcoming opportunities. Bitex is recommended as a no-KYC exchange, offering substantial trading and deposit bonuses (up to $120,000 USDT prize pool, e.g., $20 bonus for $100 deposit) via a specific referral link. Two Bit is also suggested as another no-KYC alternative, providing bonuses up to $10,000 USDT trial funds, $8,000 USDC withdrawable stablecoins, and a free $30 signup bonus with a VIP3 upgrade for one month through its referral link.
Understanding the difference between various time frames and recognizing that divergences are not always trend reversal signals, but rather indicators for potential short-term price action, is crucial for navigating volatile crypto markets.
| Insight Type | Asset | Key Insight | Key Levels/Context |
|---|---|---|---|
| Geopolitical Impact | Market Wide | Escalating tensions between Russia and NATO, including warnings of direct military engagement, triggered a quick and violent sell-off in the crypto market. | Immediate market drop occurred concurrently with news release. |
| Macro Trend | Bitcoin | A massive weekly bearish divergence, active for months, indicates a larger, multi-month cool-off and slowdown in bullish momentum for Bitcoin. | Warning issued since July; playing out as predicted despite 'Super Trending' indicator. |
| Short-Term Trend | Bitcoin | Bitcoin entered a new short-term bearish trend after breaking below $114,500, with recent bullish divergences providing only temporary relief within the larger downtrend. | Key resistance at $117,000; next support $106,700-$107,600. |
| Stabilization Signal | Bitcoin | The 4-hour Bitcoin RSI entering oversold territory, combined with potentially forming a new bullish divergence, suggests immediate short-term price stabilization, sideways action, or a slight bounce. | Watch for RSI bounce to confirm new bullish divergence for potential 1-2 day relief. |
| Altcoin Outlook | Altcoins | A short-term bullish relief in Bitcoin dominance means most altcoins will underperform Bitcoin, often dropping significantly more during Bitcoin's pullbacks. | Outliers may exist, but average altcoin performance is expected to be worse than Bitcoin. |
| Critical Support | Ethereum | Holding the crucial support area between $3,900 and $4,100 is vital for Ethereum; a confirmed break below $3,900 would trigger a significant bearish shift and potential drops to $3,400-$3,500 or $2,800. | This range was previously major resistance; now acts as support. |
| Critical Support | Solana | Solana is retesting vital support at $190-$200. A confirmed break below $190 and failure to recover would signify a major trend change from bullish to bearish, leading to a multi-week/month pullback. | 12-hour bearish divergence active; 12-hour RSI oversold suggests short-term stabilization around current support. |
| Critical Support | XRP | XRP is holding important support between $2.70 and $2.80, which has historically led to major bounces. A daily close below $2.70 would confirm bearish structure and could lead to drops towards $2.40-$2.50 or lower $2. | Massive weekly bearish divergence is still playing out, indicating a larger cool-off. |
| Bearish Trend | Chainlink | Chainlink is firmly in a larger bearish trend after breaking below $22, targeting $19-$20 as the next major support. Failure of this support could lead to further drops towards $17.50 or $15.20-$15.70. | Resistance expected near $22-$22.30. |
| Market Driver Insight | Bitcoin | Neutral funding rates despite the recent drop indicate that the sell-off was likely driven by the spot market (whales/panic sellers) rather than leveraged futures, suggesting the market is relatively balanced for now. | Supports expectation of short-term price stabilization over the next 24 hours. |
| Trading Principle | General | Implementing strong risk management, such as setting stop-losses at break-even or in profit, is essential to avoid losses and secure slight gains even in unfavorable market movements. | Demonstrated by exiting a Bitcoin long position in slight profit due to stop-loss management. |
