The pioneering digital asset is still struggling, failing to make a significant comeback, and its price is below the $95K resistance line.
Bitcoin rose above $108,000 to reach its most recent all-time high last week, but with a hawkish Fed narrative, things began to shift.
Bitcoin immediately responded by falling in value to less than $100,000, but that was only the beginning.
The following days saw sell-offs accelerating, reaching a low of $92,000 last Friday. Bitcoin paused the decline at this point, and on Saturday morning, it surged above $99,000 but was short-lived once more, as on Sunday, it dropped to $96,000 and is now sitting there.
Bitcoin’s Santa Rally Unlikely
Investors sitting on recent market gains are looking for extra returns, and a capital inflow into altcoins causes explosive rallies in brief bursts.
- Bitcoin is experiencing one of its worst December months with a 2.4 percent decline over the last 30 days, dampening a seasonally bullish period.
- After weeks of price increases, expectations of a “Santa rally,” in which assets typically rise during the holiday week, have been dashed due to profit-taking and a cautious attitude.
- Bitcoin might unexpectedly fall into the $85K range. There is a greater likelihood, though, that a decline to $90K within the next few weeks will be compelling enough for buyers to halt the sell-off as markets continue to process the Fed’s more aggressive stance, which is further supported by the accumulated desire to lock in profits following a successful year.
- Bitcoin’s market dynamics are impacted by a significant options expiration in the upcoming holiday week, so traders anticipate that Bitcoin’s choppiness will persist with a potential rotation to altcoins.
The massive expiry this Friday, when nearly $20 billion in notional value across Bitcoin and Ethereum options will expire, is the focus of everyone’s attention, according to a broadcast message released by Singapore-based QCP Capital.
Investors Turn Cold on Bitcoin
Institutional investors are growing hesitant as the crypto market correction intensifies, with spot Bitcoin ETFs in the U.S. reversing a fifteen-day inflow.
- The eleven spot Bitcoin ETFs have lost $1.17 billion over the last three trading days, while the asset has dropped more than 14% from its peak one week ago. Fidelity led the exodus with an outflow of $146 million on December 23, while the total outflows came to $226.5 million.
- On Monday, there were withdrawals from Bitwise, Ark 21Shares, Invesco, VanEck, and Grayscale funds. However, BlackRock defied the trend by receiving $31 million.
- Bitcoin’s long-term momentum is still unquestionably positive, as prices have risen to all-time highs this year.
- Many traders are unsure whether to buy now or wait for more consolidation because short-term signals suggest possible resistance and pullbacks.
While the monthly chart encourages confidence in the long-term uptrend, the daily chart warns of possible pullbacks. The market’s actions at this level will dictate Bitcoin’s next significant move, with resistance at $108,000 as the next major obstacle.
