Bitcoin price has fallen to as low as $95,000, but data suggests the correction may be largely over.
Bitcoin’s price correction to $98,137 BTC continued on December 19th, resulting in the largest drop in the fourth quarter on BTC’s daily chart and the biggest drop since August 5th. While the crypto asset briefly regained positions above $100,000, the formation of an apparent bearish engulfing pattern opened the opportunity for further correction.
Bitcoin rally to be “most volatile cycle” in 2024
Bitcoin’s bearish reaction stemmed from caution over Fed Chairman Jerome Powell’s suggestion that the Fed will only cut interest rates by 50 basis points in the entirety of 2025, lowering previous expectations from four rate cuts to two.
This development sparked speculation about further declines in risk assets such as cryptocurrencies, but Glassnode suspected this would not be the case based on the evolving nature of BTC in this cycle.
The on-chain analytics platform said that since BTC’s first bull run in 2012, the severity of down periods in bull cycles has decreased and market capitalization has increased. Bitcoin’s largest decline in 2024 was 32%. For comparison, 2021 was 63%, 2017 was 36%, 2013 was 71%, and 2011 was 49%.
Glassnode said, “This may reflect the large demand generated by spot ETFs and growing interest from institutional investors.”
Bitcoin should therefore essentially avoid a stronger correction as the consolidation period evolves.
Bitcoin is testing key support at $99,000 and $97,000
Since hitting an all-time high of $108,366 on December 17, BTC has fallen to $98,744. Glassnode founder Rafael Schultze-Kraft identified this price range between $99,000 and $97,000 as the strongest support zone based on Bitcoin’s cost-based distribution. Cost-based distribution helps investors evaluate where the total supply is being purchased and most distributed among various price ranges.
Bitcoin researcher Axel Adler Jr. noted that similar price ranges have important implications. The researcher said:
“The next important support level is $97.9k, held by the cohort that has been holding the coin for a week to a month.”
From a technical perspective, Bitcoin’s bull market structure remains intact on both the medium-term and long-term charts. Combining support levels derived from on-chain with market analysis, a common value between $97,500 and $95,500 was determined.
In this price range, a fair value gap (FVG) was detected for the first time since October, along with a possible retest of the 50-day EMA level. 12. Additionally, $95,000 is also a key base support for trend continuation.
Considering that the daily candle closes will push the price below $95,000, the chances of Bitcoin dropping to $90,000, where a key liquidity zone is set, will increase significantly. However, the immediate focus of most traders will be on Bitcoin’s reaction between $100,000 and $95,000.
