On January 9th, Bitcoin’s (BTC) price dipped to an all-time low within the given range at $91,055, a figure last seen on December 1st, 2024. The next anticipated price floor is roughly under $90,000, and certain market experts predict further drops below this point.
However, the following four reasons suggest that BTC may avoid a drop below $90,000.
Crypto Fear and Greed Index drops to 3-month low
The Crypto Fear & Greed Index has decreased from a peak of 78 to 50, reflecting a 9% drop in Bitcoin prices between January 7th and 10th. This index, which measures broader market sentiment, has now reached its lowest point since October 14th.
According to CryptoMoon’s latest report, the recent steep decline in index values represents one of the most significant drops seen in several years, leading to a change in market sentiment from “greed” to “neutral.
In simpler terms, this situation could be considered good news because, in the past, Bitcoin prices have often turned around when the market sentiment indicator moved towards neutral or fear levels.
Bitcoin metrics indicate “market peak” is not in yet
Bitcoin raised bearish concerns after it failed to hold a position above $100,000 on Jan. 6.
Over the course of two months, there were four instances of liquidation, suggesting possible vulnerability and impending financial shortage. This led the markets to anticipate another phase of adjustments. Yet, when examining Bitcoin from a foundational perspective, it hasn’t shown any signs that indicate the peak of a bull market.
According to CoinGlass analysis, the highest-ranking cryptocurrency has not yet reached or exceeded its prior all-time market highs. The signals for a bull market peak involve about 30 different conditions across charts and indexes, but none of these metrics have triggered levels seen during the 2017 and 2021 bull markets so far.
In simpler terms, Mikybull, a cryptocurrency expert, explained this recent event and suggested that these temporary drops in price could be seen as a beneficial “chance” before the anticipated surge.
Bitcoin whales bought 34K BTC after the end of year
Over the past few weeks, temporary market fluctuations have caused some investors to sell, but larger shareholders have consistently bought Bitcoin starting from late December.
Cauê Oliveira, the leader of Blocktrends’ research department, pointed out that institutional investors have amassed approximately 34,000 Bitcoins valued at around $3.2 billion since its price dipped below $108,000 on December 17th. He further noted that this accumulation occurred during this period.
“Large players took advantage of the consolidation to open TWAP positions, patiently accumulating just below US $95K.”
As an analyst, I’ve observed that institutional demand continues to thrive even following Bitcoin’s recent dip below $100,000. To add to this, MAC.D, a trusted CryptoQuant analyst, posits that while short-term investors may be incurring losses at present, this situation presents an opportunity for accumulation instead of inducing panic selling. In simpler terms, it suggests that now could be the right time to buy, rather than sell in haste.
“Selling coins at this juncture might prove to be a very unwise decision.”
Selling $6.5 billion BTC in six trading days seems “impossible”
A significant factor contributing to the drop in Bitcoin’s price recently has been speculation about the U.S. government possibly selling approximately $6.5 billion worth of Bitcoin. In response to this news, a crypto analyst named Miya expressed doubt that the government could successfully complete such sales within just six trading days, finding it extremely difficult.
As President-elect Donald Trump prepared for his inauguration on January 20th, Miya underlined the difficulty in offloading such large quantities of Bitcoin at a time when a significant political event was imminent. The situation becomes even more intricate because Trump intends to create a Bitcoin reserve, implying that it could become a point of discussion during his formal swearing-in ceremony.
Essentially, the bitcoin supporter felt it was quite probable that Bitcoin would reverse its trend because the market had already accounted for the negative predictions about it.
As an analyst, I’ve observed a significant shift in Bitcoin‘s market dynamics. We’ve dipped below our previous range on the daily chart, but now it appears that liquidity pools are aggressively pursuing upward momentum – a trend suggested by MikyBull’s analysis.
While it’s still plausible to see a brief dip below $90,000 for Bitcoin, I anticipate a swift, V-shaped recovery to materialize in the near future.
In this post, we’re simply providing general insights and it’s essential to understand that these ideas should not be misconstrued as legal or financial guidance. The perspectives shared belong solely to the author and may not mirror or align with the views held by CryptoMoon.
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2025-01-10 23:11