As a seasoned researcher with years of experience observing and analyzing the crypto market, I find myself in a fascinating position when it comes to Bitcoin (BTC). The recent tumble from over $108,000 to under $95,000 has stirred up quite a frenzy among investors.
As a crypto investor, I found myself on the sidelines watching in awe as Bitcoin soared from around $70,000 to over $108,000 within mere weeks following Donald Trump’s landslide victory in the US presidential elections. This sudden surge left many of us outside the crypto investment circle shaking our heads in disbelief and wishing we had jumped on that bandwagon earlier.
Nevertheless, Bitcoin’s inherently unpredictable fluctuations often result in significant corrections that offer chances for latecomers to invest. Lately, the value of Bitcoin plummeted by a large margin, prompting many investors, as suggested by Santiment, to seize the opportunity and buy during this price drop.
Moreover, history shows that it could send BTC flying again.
Is BTC About to Bounce?
According to our analysis, the last instance where discussions erupted in a similar fashion was around early August, when the cryptocurrency’s value dropped below $50,000. However, within just a few days, its value surged by more than 25%, reaching over $62,000.
Should past trends persist in the Bitcoin market today, despite its significantly increased market capitalization, there’s a possibility that Bitcoin could bounce back from its recent significant dip and aim for another record high surpassing $120,000 once more.
Today’s drop in Bitcoin price to around $95.5K has sparked a significant surge in discussions about purchasing cryptocurrencies at a discount, marking the highest level of such conversations in over eight months. The last time we observed such enthusiasm for dip buying was during the major crash on August 4th. Since then…
— Santiment (@santimentfeed) December 20, 2024
Not So Fast
Although the ‘buy-the-dip’ history shows that BTC’s correction could be over, this narrative is not supported by other on-chain and technical metrics, such as one particular demand zone.
Yesterday, before bitcoin decisively dipped below the $100,000 mark, I was aware of IntoTheBlock’s prediction. They had pointed out that a significant number of investors were buying at around $97,500, accumulating over 1.4 million BTC. This massive purchase activity transformed this level into an ‘essential’ support zone. Regrettably, it seems that this support has been breached, and we are now experiencing a downward trend.
When these essential safety nets are broken and newer investors find themselves with losses (only on paper at this point), there’s a tendency for them to sell off their assets. This additional selling can create increased pressure on the underlying asset due to its intensity.
Will Bitcoin retrace below $100k?
Interestingly, a significant demand zone has formed just under $100k.
Approximately 1.45 million Bitcoins were amassed with an average purchase price of around $97,500 each, creating a significant possible level of support.
— IntoTheBlock (@intotheblock) December 19, 2024
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2024-12-20 11:02