Bitcoin’s price experienced a significant downturn, trading around the $91,000 level by December 30, reflecting a 15% decline from its peak earlier this year. This downtrend continues despite substantial acquisitions by companies like MicroStrategy and Tether. MicroStrategy purchased an additional 2,138 Bitcoins last week, marking their eighth consecutive week of buying and raising their total to 446,400. Tether increased its holdings with an acquisition of 7,630 Bitcoins, now holding over $7.7 billion in Bitcoin. Other major players, such as Marathon Digital, Riot Platforms, and Hut 8 Mining, are also expanding their Bitcoin reserves.
The dip in Bitcoin’s price is largely attributed to profit-taking by investors, after the cryptocurrency more than doubled in value this year. Additionally, a risk-off sentiment is observed in the market; the US dollar index rose to 108.14, while the Dow Jones and Nasdaq 100 dropped considerably by 670 and 320 points, respectively. Concerns over bond vigilantes are also mounting as traders anticipate Donald Trump’s presidency, driving up bond yields. The 30-year yield rose to 4.76% and the 5-year yield to 4.3%, approaching their annual peaks. These high yields pose potential downside risks for both crypto and stock markets as warned by economists.
Technically, Bitcoin seems poised for further declines. The daily chart indicates a sharp retreat, with the 50-day Exponential Moving Average now functioning as resistance. Bitcoin appears set to fall below the support level at $91,430, which it tested thrice this month. A head and shoulders pattern, indicative of a negative reversal, has formed, aligning with Bitcoin’s move past the Murrey Math Lines’ weak, stop and reverse point at $93,750. This suggests Bitcoin might drop to the next major support at $73,780, potentially leading to an overall 20% decline from its present value.
