Bitcoin has experienced violent fluctuations recently, quickly falling back from its previous all-time high, with the current trading price hovering around $98,403. With the dramatic change in market sentiment, the cryptocurrency market is facing a new round of selling pressure. Whether it is the integration phase at the technical level or the complexity of the macroeconomic environment, the market poses new challenges to investors at every step. This article will discuss the current situation and future of Bitcoin and the crypto market from three aspects: recent events, technical analysis, and market trends.
Recent Market Highlights: The Trump Effect Fades, Bitcoin Loses Key Support
Rapid Decline After Reaching All-Time High
Trump's victory briefly pushed Bitcoin to a historic high of $103,800, attracting a large number of investors. However, this "Trump effect" gradually faded after the election, coupled with market concerns about inflation data and uncertainty about the Federal Reserve's policy, Bitcoin fell below six figures on December 10, reaching a low of $94,000. CoinGecko data shows that the crypto market lost $150 billion in market capitalization within 24 hours.
Cautious Sentiment Rises in the Market
Sean Farrell, the strategy chief at Fundstrat Global Advisors, pointed out that in the context of the upcoming inflation data and the potential adjustment of the Federal Reserve's policy, investors are choosing to reduce their positions and hedge against risks. In addition, Katie Stockton's technical analysis suggests adopting a "neutral short-term bias" strategy, reducing position exposure to cope with the current volatility.
Long-Term Support and Institutional Buying
Although the market sentiment is cautious, institutional investment still provides some support for Bitcoin. For example, the Bitcoin giant MicroStrategy recently announced that it will increase its Bitcoin holdings by $210 million, which is seen as a potential signal of confidence in long-term demand.
Technical Analysis: Bitcoin's Key Support and Resistance
Short-Term: Key Support Levels Are Precarious
Bitcoin shows a short-term downward trend on the 1-hour chart, currently approaching the key support of $97,000. Although trading volume has slowed down, the selling pressure has not diminished, and if it breaks below $95,000, it may exacerbate market turmoil.
Medium-Term: Consolidation Phase Difficult to Break
On the 4-hour chart, Bitcoin's price is fluctuating in the range of $96,500–$100,000, indicating a hesitant sentiment in the consolidation phase. If the trading volume fails to break through, the market may continue to trade sideways until new driving forces emerge.
Long-Term: Bullish Trend in Doubt
The daily chart shows that Bitcoin is finding support around $97,000, but with the decline in trading volume, the market momentum has clearly weakened. Long-term investors need to pay attention to whether it will fall below the psychological support of $95,000.
Derivatives Market and Altcoin Plunge
Liquidation Wave Exacerbates Market Volatility
In the past 24 hours, the scale of derivatives market liquidations reached $1.5 billion, with more than 510,000 traders being forced to close their positions. Among them, long positions accounted for the majority of the losses, about $138 million. The chain reaction of liquidations has exacerbated market panic, especially in the Altcoin sector, which has performed particularly poorly.
Altcoin Avalanche Effect
Bitcoin's volatility has triggered a comprehensive collapse of Altcoins:
- Ethereum (ETH): down 7%.
- XRP: down more than 11%.
- Solana (SOL): down 6.5%.
- Small-cap tokens: such as PNUT and DYDX, down 22% and 21% respectively.
These declines further highlight the high-risk nature of the Altcoin market and remind investors to be cautious in high-volatility markets.
Macroeconomic Influences
- The market is currently focused on the upcoming inflation data and the Federal Reserve's policy adjustments, which may have a significant impact on Bitcoin's price.
- Although the market is under short-term pressure, the long-term confidence of institutional investors is still an important factor supporting Bitcoin. For example, MicroStrategy's large-scale purchases indicate that confidence in long-term growth potential still exists.
BTX Insights Summary: Investors Need to Maintain Rationality and Patience
Bitcoin's violent fluctuations once again remind the market that its high risk and high volatility are still a major feature of crypto assets. In the current complex market environment, investors should pay attention to the following points:
- Short-term strategy: closely monitor the $97,000 support level, and changes in trading volume will determine the short-term price trend.
- Long-term trend: institutional buying indicates that long-term demand still exists, and the possibility of falling below $95,000 may provide an opportunity to buy the dips.
- Risk management: the recent liquidation wave highlights the importance of risk management, and traders should strengthen control over their positions.
In the next few days, the market direction may depend on the further development of Federal Reserve policy and market sentiment. Investors need to maintain rationality and patience, and seek opportunities in the midst of uncertainty.
The above content is from public market information and is for reference only, and does not constitute any investment advice. The cryptocurrency market has high risks, and investment requires caution.
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