As a seasoned crypto investor with over a decade of experience, I have seen my fair share of market fluctuations and learned to navigate through them with patience and discipline. The recent downward trend in Bitcoin price, despite major acquisitions by MicroStrategy and Tether, has left me somewhat concerned but not entirely surprised.
Having witnessed similar patterns in the past, I understand that markets often react to a combination of factors, such as profit-taking, risk-off sentiment, and macroeconomic events like bond vigilantes. Given the current dynamics, it is possible that Bitcoin’s price could crash to $73,780, which would represent a 20% decline from its current level.
However, I am not one to make hasty decisions based on short-term market movements. Instead, I prefer to analyze the long-term trends and potential opportunities that arise during periods of market correction. In my experience, these downturns often present buying opportunities for those who are patient and well-informed.
As a joke, I always like to remind myself and others that crypto investing is not for the faint of heart or short on patience. After all, it’s said that the best time to invest in Bitcoin was eight years ago, the second-best time is today – but only if you have enough time left to wait for it to double again!
Despite the recent purchases by MicroStrategy and Tether, the value of Bitcoin persisted in a steep decline in its ongoing downtrend.
On Monday, December 30th, the price of Bitcoin (BTC) hovered around $91,000, representing a 15% drop from its peak this year. Technically speaking, it appears there may be further decreases ahead.
Even though MicroStrategy recently purchased an additional 2,138 Bitcoins last week, marking their eighth straight week of acquisitions, these new purchases did not reverse the ongoing decline in their holdings, currently at 446,400 Bitcoin units.
Additionally, Tether increased its Bitcoin holdings by 7,630 units, bringing the total value to approximately $7.7 billion. Similarly, other major firms such as Marathon Digital, Riot Blockchain, and Hut 8 Mining are consistently boosting their Bitcoin reserves as well.
Bitcoin’s drop can be linked back to investors cashing out their profits as they’ve seen a nearly doubling of its value this year. Additionally, this decline is connected to a cautious market atmosphere, demonstrated by the US dollar index climbing up to $108.14 and substantial drops in the Dow Jones and Nasdaq 100 indices, which respectively fell by 670 and 320 points.
As an analyst, one factor I believe played a role is the potential anxiety over “bond vigilantes” in relation to President Donald Trump’s incoming term. These bond vigilantes are known for increasing bond yields when government budget deficits expand.
Over the past period, these trends have pushed the 30-year interest rate up to 4.76% and the 5-year rate close to its peak this year, at approximately 4.3%. As previously mentioned, there is apprehension that rising bond yields might pose potential threats to the crypto and stock markets in 2025.
Bitcoin price could crash to $73,780
Over the past few days, the daily graph indicates that Bitcoin (BTC) has experienced a significant decline. This downturn has caused the 50-day Exponential Moving Average to become a potential resistance point, and currently, BTC is trying to dip below the critical support at $91,430 – a level it has tested three times this month without succumbing.
Furthermore, it seems that Bitcoin is exhibiting a head and shoulders formation, which is often interpreted as a bearish signal for a price reversal. Additionally, it has fallen below the vulnerable, sell-and-reverse level indicated by the Murray Math Lines at approximately $93,750.
Based on my personal experience and analysis of historical market trends, I believe that if Bitcoin continues to follow its current trajectory, it may drop to the next major support level at $73,780, which is the peak from March 14th. As someone who has closely followed the cryptocurrency market for several years, I’ve seen similar patterns in previous bull runs, and a decline of around 20% from its current price could be expected if this support level is breached. However, it’s important to remember that past performance is not always indicative of future results, and there are always unexpected factors that can influence the market. Therefore, while I believe this could happen, I would still urge caution and encourage readers to do their own research before making investment decisions.
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2024-12-30 19:32