Bitcoin’s Price Drops Below $105,000 Amid Ongoing Market Volatility
A New All-Time High and a Sudden Drop in Price
On December 17th, Bitcoin’s price reached an unprecedented high of $108,365, only to plummet below $105,000 shortly after. The short-term market fluctuations occurred ahead of the United States Federal Reserve’s interest rate announcement on December 18th. Market analysts predict a 25-basis-point cut, which is expected to have a significant impact on cryptocurrency prices.
Long-Term Holders Positioning Themselves for Future Gains
Despite the short-term volatility, one crypto analyst has highlighted a bullish scenario taking shape. As illustrated by the chart below, long-term holders are positioning themselves for future gains.
Chart: Bitcoin LTH Profit-Taking Drops from $10 Billion to $3 Billion
In November 2024, Bitcoin registered a surprising return of 37%, reaching a new all-time high that was followed by a profit-taking frenzy. As Cointelegraph reported, selling pressure reached 366,000 BTC per month in November, estimated to reach around $10 billion.
However, according to Percival, a verified Bitcoin analyst on CryptoQuant, the magnitude of profit-taking has significantly cooled down over the past three weeks. The chart below illustrates the profit realized by long-term holders dropped from $10 billion on November 25th to $3 billion on December 14th, even though BTC prices rallied 12% during that time period.
Bitcoin Net Realized Profit Chart
According to Percival, this indicates that long-term holders have realized most of their profits at this stage and are ready to see further increases.
A Neutral Trend Between Buyers and Sellers
Additionally, with the help of a 90-day market vs. realized price gradient oscillator chart, Percival explained that the index is in an equilibrium zone of 0.5, which indicates a neutral position between buyers and sellers. This strong balance between the two sides demonstrates the potential for an "upward phase," as the crypto asset is neither overbought nor oversold.
Chart: Bitcoin 90-Day Market vs. Realized Price Gradient
This chart illustrates that the index is in a neutral zone, indicating a balance between buyers and sellers.
Coinbase Premium Falls Amid Positive Developments
Despite the positive development of decreased profit-taking and a neutral trend, it is essential to note that the Coinbase premium has been falling since the beginning of December. Yonsei Dent, a pseudonymous crypto trader, highlighted that over the past two weeks, the premium has been on a "notable decline" with respect to BTC prices.
Chart: Bitcoin Price Divergence with Coinbase Premium
This inverse correlation suggests that BTC’s rally was not supported by demand from US investors. The analyst added, "It could indicate underlying weakness in medium-term upward momentum. Investors should remain cautious and monitor this development closely."
Conclusion: A Choppy Market Structure Amid Ongoing Uncertainty
Regardless of its choppy market structure, Daan Crypto, an independent crypto trader, said that Bitcoin had followed last year’s price action. The trader expected the price to chop further as 2024 wraps up before an "actual breakout" in Q1 2025.
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This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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