Bitcoin (BTC) experienced a waning Christmas rally, facing hurdles in surpassing the $100k threshold on Boxing Day. The Federal Reserve of the United States conducted a two-day meeting commencing on 17 December, concluding with a policy statement that revised the anticipated interest rate cuts in 2025 from four to just two.
This resulted in a sharp decline of over 2.5% in the Dow Jones, amounting to a reduction of more than 1,150 points. While these losses were swiftly recuperated in traditional markets, Bitcoin did not witness a similar recovery.
Impact of Risk-on Asset Classification on the Recovery Pace
Typically, the broader cryptocurrency market mirrors Bitcoin’s movements. Within the last 24 hours, BTC plummeted by 2.75%, and the altcoin market saw a devaluation of 2.31%. The examination of BTC’s trend on the 4-hour chart revealed the continuity of a bearish market structure.
The shift to a bearish stance occurred on 19 December, depicted in orange. Subsequently, the A/D indicator displayed a gradual decline, indicating diminished buying pressure. Moreover, the moving average displayed a bearish crossover, emphasizing the downward momentum prevailing over the past ten days.
Current Crypto Market Downturn: Prospects for an Upswing in the Upcoming Month
Analysis conducted on the top trader positions on Binance using Coinglass data unveiled a ray of hope in the short term. The research illustrated that the CryptoCrypto metric stood at 1.95, reflecting the long or short positions maintained by the top 20% of traders.
Long positions constituted 66.12% of the total, while shorts accounted for 33.88% – indicating a bullish outlook among the leading traders.
Further bolstering this optimistic short-term outlook was the liquidation map. The prevalence of liquidations towards the upside suggested a higher probability of a northward liquidity hunt in the approaching days.
Based on the analysis of the past week’s data, CryptoCrypto anticipated resistance around the $97.6k level, potentially repelled by sellers. Heightened volatility is expected as the end of 2024 approaches.