‘Normal’ Correction or Bull Market End for Bitcoin and Crypto?

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As a seasoned analyst with over two decades of experience in the financial markets, I’ve seen my fair share of market fluctuations and corrections – and the current state of Bitcoin is no exception. Having closely monitored the digital asset since its inception, it’s clear to me that the landscape of the cryptocurrency world can change drastically in a matter of days, as we’ve witnessed with the recent price drop from $108,000 to $94,500.

In the world of cryptocurrencies, the scenery can undergo significant shifts in just a few days. Keep in mind that Bitcoin reached an unprecedented peak of more than $108,000 on Tuesday, but since then, its value has dropped to around $94,500.

Following some comments made by Federal Reserve Chair Jerome Powell, it was clarified that the central bank would not be able to invest in Bitcoin, contrary to previous speculations linked to President Trump. Additionally, he indicated that there may not be any significant cuts in interest rates throughout the year 2025.

Due to Bitcoin’s response to those remarks, there have been discussions within the cryptocurrency community about whether this is merely a typical correction within a bull market phase or if Bitcoin’s post-Trump victory euphoria has ended.

Bull Market’s End Side

Before Donald Trump’s election victory, Bitcoin’s price had already begun to rise following the U.S. Federal Reserve’s shift in monetary policy and the subsequent lowering of interest rates. Notably, the initial rate reduction of 50 basis points was particularly significant.

In simpler terms, risky investments like Bitcoin showed quick price surges. But it appears that the Federal Reserve’s decisions are having a more significant influence on these assets’ price fluctuations than most people thought.

It turns out that the anticipated 0.25% decrease announced on Wednesday did not trigger further price rises as one might have expected. Instead, the central bank’s cautionary statement about possibly altering its approach sparked a dramatic sell-off in Bitcoin and the broader cryptocurrency market.

Therefore, individuals who believe the bull market may have ended were given some backing. If the Fed does stop reducing interest rates, the bull market for Bitcoin could abruptly end. Already, Powell’s actions have influenced US investors’ attitude towards cryptocurrency, causing significant net outflows from spot Bitcoin ETFs – a record low since their creation about a year ago.

As a crypto investor, I find it significant that some analysts view the current $94,000 support zone as crucial for bitcoin. It seems we’re approaching this area soon. If this support fails, the asset could potentially drop to around $90,000 and even lower towards $80,000.

Just a Correction Side

Captain Faibrik emphasized the importance of the $94,000 mark as a significant support level during this correction period. To their 100,000 followers on X platform, he explained that if the price fell to this point, it would represent a “refreshing reboot”, potentially sparking a reversal and extending the asset’s multi-month surge.

$BTC #Bitcoin Correction is almost Done..!!

— Captain Faibik (@CryptoFaibik) December 20, 2024

In simpler terms, Crypto_Rover also expressed the view that the recent market dip is just a minor adjustment, referring to it as the ‘last bear trap’. He advises investors not to panic sell due to these fluctuations.

If you survived the #Bitcoin bear market…

Don’t let this final bear trap shake you out this bull market.

Don’t give up now.

The next 3 months can truly change your life.

— Crypto Rover (@rovercrc) December 20, 2024

Without a doubt, the $94,000 level appears crucial for Bitcoin’s future price fluctuations. It was briefly challenged a few times last week, and it looks like we might see another test soon. You may recall that following the second test on December 10, Bitcoin rebounded and reached a new record high only a week later.

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2024-12-20 13:22