Bitcoin (BTC) experienced a significant price dip, falling to a low of $92,941 per coin. The overall cryptocurrency market mirrored this downturn, shedding 1.61% in value, with Bitcoin itself losing 1.42% in the last 24 hours. While the dip is notable, experts are pointing to the lack of significant market movement over the holiday period as a key factor.
Bitcoin’s price movements have been unpredictable, with the asset briefly dipping below $93,000 before making a minor recovery. The day before, Bitcoin had been comfortably above $95,000, closing Saturday at $95,529 per coin. The trading volume for Bitcoin during this period has been relatively low, clocking in at $26.18 billion for the day.
The technical indicators on Bitcoin’s daily chart reveal a mix of signals. Key oscillators, such as the Relative Strength Index (RSI) at 43, the Stochastic at 14, and the Average Directional Index at 26, are all sitting in neutral territory, reflecting a market in limbo.
On the other hand, moving averages are signaling a bearish trend. The short-term simple moving averages (SMAs) and exponential moving averages (EMAs) from 10 to 50 days are pointing down, but longer-term moving averages are still in bullish territory. This contrast suggests that while short-term pressure is present, the long-term outlook remains positive.
The holiday season is often marked by lower trading volumes, and this year has been no exception. With fewer active traders in the market, Bitcoin’s price has been more vulnerable to fluctuations. During this period, the market has seen more sellers than buyers, likely keeping Bitcoin’s price in a consolidating range until the start of the new year.
The recent data from Cryptoquant shows that Bitcoin’s sell-side liquidity has dropped drastically, reaching a low of 6.6 months of liquidity. This represents a sharp decline from October, when the liquidity was at 41 months. This could indicate that selling pressure is easing, with some experts suggesting that Bitcoin might see renewed upward momentum in the first and fourth quarters of 2024 as liquidity continues to decline.
Data from Cryptoquant also highlights a significant trend: U.S. interest in Bitcoin has cooled during the holiday period. The Coinbase premium gap, which measures the difference in price between Bitcoin on Coinbase and other exchanges, has turned negative by $169.18. This suggests that U.S. investors have been less active in trading Bitcoin over the last few days.
Meanwhile, in South Korea, the so-called “Kimchi premium” persists, although it has decreased. As of December 29, the premium stands at 1.3%, down from 3.38% earlier in the week. The Kimchi premium occurs when Bitcoin prices in South Korea are higher than in other countries due to local demand, and its decline could signal a shift in regional trading activity.
In terms of trading pairs, Tether (USDT) remains the dominant asset in Bitcoin trades, followed by the U.S. dollar, FDUSD, USDC, and the Korean won. Interestingly, the Korean won still accounts for 2.09% of all Bitcoin trades this weekend, underscoring the continued significance of South Korean traders in the global Bitcoin market.
The overall cryptocurrency market is valued at $3.27 trillion, a decrease of 1.61% from the previous day. While Bitcoin has seen a modest decline of 1.42% against the U.S. dollar, other major cryptocurrencies have experienced more significant losses. XRP, for instance, dropped by over 3%, BNB fell by 4.27%, and DOGE lost 2.25%.
On the flip side, some tokens saw notable gains. Phala Network (PHA) stood out as the day’s top performer, gaining 18.26%. Interestingly, the FTX Token (FTT), tied to the now-defunct FTX exchange, surged by 12.77%. This surprising uptick in FTT is something of an anomaly, given the ongoing issues surrounding FTX.
The downturn in Bitcoin’s price led to significant liquidations in the derivatives market, with a total of $126.39 million in liquidations. Of this amount, $90.64 million came from long positions on Sunday, highlighting the market’s volatility and the risks faced by traders during periods of price uncertainty.
Looking ahead, the outlook for Bitcoin remains uncertain in the short term, with the holiday trading lull likely to persist until the new year. However, as liquidity continues to decrease, the selling pressure may ease, potentially leading to a more favorable market environment for Bitcoin in early 2024. Traders and investors alike will be watching closely for signs of renewed activity in the coming weeks.
Bitcoin’s recent dip below $93,000 serves as a reminder of the volatility that characterizes the cryptocurrency market, especially during slower trading periods like the holidays. While short-term indicators are bearish, long-term trends still suggest potential for growth, particularly as liquidity declines and market conditions improve. For now, the market waits for a new wave of activity to emerge in the new year, which could determine Bitcoin’s next move.
Steven is an explorer by heart – both in the physical and the digital realm. A traveler, Steven continues to visit new places throughout the year in the physical world, while in the digital realm has been instrumental in a number of Kickstarter projects. Technology attracts Steven and through his business acumen has gained financial profits as well as fame in his business niche. Send a tip to: 0x200294f120Cd883DE8f565a5D0C9a1EE4FB1b4E9
Get the latest Crypto & Blockchain News in your inbox.
Join Now