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- Bitcoin faces downward pressure with a possible drop to $80,000, as bearish signals and low liquidity raise concerns.
- Despite the negative sentiment, some analysts see buying opportunities for long-term investors, citing potential market recovery.
Bitcoin’s price is still fluctuating and is already in dangerous territory this Christmas week. BTC/USD currently is right below $100,000; analysts have noted the high likelihood of a significant pullback. A weekly chart-based doubt has been raised by a ‘bearish engulfing’ candlestick pattern, erasing a five-week rally in the process as well. Key traders suggest a potential drop toward old all-time highs of $74,000, with downside momentum appearing likely in the short term.
Last week’s hawkish Federal Reserve meeting also impacted market sentiment, leaving risk assets, including Bitcoin, vulnerable. Analysts note that Bitcoin could experience further downward pressure as investors reassess their short-term outlooks.
Liquidity and Historical Trends Raise Concerns
The holiday season typically brings reduced trading volumes, which can amplify price volatility. Current liquidity levels on major exchanges suggest two key targets: $115,000 on the upside and $80,000 on the downside. Traders are closely monitoring these zones, with the latter representing a typical bull market correction.
Historical data indicates that Bitcoin has seen drawdowns of 20-30% during prior bull cycles. Going down to $80,000 would make sense in these patterns; some also maintain that it is just a normal correction. However, some kept their positive outlook, pointing to how certain stocks performed on December 26 as the basis for a bounce back within the short term.
Onchain Indicators Signal Buying Opportunities
As you will recall, during this bearish period, certain analysts have noted certain factors that are favourable in the long run to long-term shareholders of shares. CryptoQuant reported that Smart DCA, a measure of domains in which dollar-cost averaging (DCA) may be financially beneficial, has returned to the range last touched in December of last year. The metric’s value shows BTC’s trading, pointing to the areas where it is sold below the short-term realized price.
This renewed cosmic buy signal occurs while social mood on social networking sites is the lowest in the current year. The Algorithm-Trading and sentiment platform Santiment, established early this year, provides data that indicates social sentiment affects trading decisions. Traders are more fearful, uncertain, and doubtful, or in common terms known as FUD: Fear, Uncertainty, Doubt. Contrarian investors view FUD as bullish. Almost every bear trend in stock markets was marked by negative sentiment before a market rebound began.
Macroeconomic Data in Focus
There will not be many macroeconomic events in the upcoming week, but the new unital jobless claims in the US on December 26 may cause changes in the market. The Federal Reserve’s more aggressive posture in recent months has created risk factors, and the spectre of possible liquidity issues obscures Bitcoin’s near-term future.
As the year winds down, market participants are bracing for heightened volatility and closely monitoring key levels. While bearish scenarios dominate the outlook, long-term holders and strategic investors may find opportunities amid the uncertainty.
