As a seasoned researcher with over two decades of experience in the financial markets, I have learned to expect volatility and corrections as part of the investment landscape. The current correction in Bitcoin, which has wiped out all gains from the past month, is not an unusual event for me. In fact, it’s reminiscent of the market cycles we saw in 2017, where week eight was typically a corrective week.
At the moment, Bitcoin prices have dropped approximately 12% from their peak of about $108,000 on December 17, and it seems that this decline is intensifying further.
As a market analyst, I observed that the asset dipped to an intraday low of $93,810 during the Asian trading session early on Monday morning. However, it swiftly rebounded and touched $96,000. Subsequently, there was yet another minor decline.
The “bearish engulfing” pattern emerged in the weekly candles, as per the analysis by crypto expert “Rekt Capital.” This pattern indicates that all the progress made in the last month, which was previously considered gains, has now been reversed due to the correction.
“Bitcoin is showing increasing signs of transitioning into a multi-week correction,” he said.
#BTC
Bitcoin has confirmed a Bearish Engulfing candlestick formation$BTC #Crypto #Bitcoin
— Rekt Capital (@rektcapital) December 23, 2024
Bitcoin Corrections Are Normal
In historical patterns, typically around the eighth week, there’s a tendency for the Bitcoin price to experience a correction, as an analyst pointed out when making comparisons with past market trends.
In 2017, week nine showed some corrective measures, though not as significant as those seen in week eight, he noted, furthermore, he mentioned.
As an analyst, I usually observe that after Bitcoin (BTC) navigates through the typically corrective weeks 7 and 8, the subsequent correction often approaches its lowest point.
This week has been particularly tough for the asset, marking one of its most challenging periods since Donald Trump was elected U.S. President back in early November. Furthermore, the Federal Reserve’s cautious stance on monetary policy has somewhat dampened enthusiasm about Trump’s support for the cryptocurrency sector.
Nevertheless, BTC remains up more than 40% since Trump’s victory.
According to Sean McNulty, director of trading at Arbelos Markets, we should maintain the $90,000 price point for Bitcoin until the end of the year. If, however, we fall below this level, it might lead to additional sell-offs or liquidations.
In simpler terms, David Lawant, who leads research at crypto prime broker FalconX, stated that due to the current low liquidity situation, there might be increased market volatility as we approach the end of the year.
On December 27th, it’s expected that one of the largest crypto options expiration events ever recorded will take place. Approximately $18 billion worth of Bitcoin (BTC) and Ethereum (ETH) contracts are set to expire on this date.
As an analyst, I noticed a significant outflow of approximately $950 million from Bitcoin Exchange-Traded Funds (ETFs) over the course of Thursday and Friday, driven primarily by investor unease stemming from the recent market downturn.
Some Altcoins Showing Recovery
On this Monday morning, several alternative cryptocurrencies have displayed small recoveries following their recent corrections.
On this particular day, Solana (SOL) rose by 2.2% to hit a price point of $186. Chainlink (LINK) experienced an increase of 5.1%, reaching a value of $23. Toncoin (TON) also saw a gain of 3.5%, resulting in a trading price of $5.50. Lastly, Stellar (XLM) went up by 3%, with its current value being $0.363 as we speak.
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2024-12-23 09:58