As a seasoned researcher with over two decades of experience in financial markets, I find myself constantly intrigued by the dynamic relationship between traditional finance and cryptocurrencies, particularly Bitcoin. My journey has taken me through various market cycles, from the dot-com bubble to the global financial crisis, and now to this fascinating world of digital assets.
Over the last day, Bitcoin’s price fluctuations have caused turmoil throughout the crypto market and triggered numerous liquidations. Specifically, Bitcoin experienced a drop of nearly 5% within the past 24 hours, causing it to fall beneath the $100,000 significant level once more. Despite finding support around $96,000, Bitcoin has still seen a decrease of approximately 10% over the past three days.
It’s worth noting that an analyst on the TradingView platform proposed the Bitcoin drop might be part of a larger pattern in financial markets, and they hinted at a possible minimum price point for Bitcoin during this decline.
Bitcoin Price Declining Between Support Zones In Fibonacci Retracement Levels
As I, a researcher, observe Bitcoin’s current market dynamics, I find an intriguing correlation with Fibonacci retracement levels that are commonly employed by traders for identifying potential support and resistance points. The latest TradingView analysis indicates that the Bitcoin price is now situated within a retracement zone in the 4-hour timeframe, falling between the 0.618 and 0.786 Fibonacci retracement levels from its recent all-time high of 108,135, which it attained merely three days prior to this analysis.
Historically, this price range has served as a robust area where Bitcoin has often rebounded. The analyst notes that Bitcoin typically rebounds at the 0.786 level, implying that the cryptocurrency could potentially find a short-term low around this price range, which is close to the $95,000 mark.
Previously mentioned, the Bitcoin price showed resistance at approximately $96,000, but Fibonacci retracement indicators hint at potential further drops. The analyst predicts it might dip to around $93,800 as an overextension. Any decrease beyond this could potentially trigger a larger fall.
Correlation With Stock Index Sell-Offs
One significant reason behind Bitcoin’s recent drop could be the massive selling off observed in major U.S. stock exchanges. Despite Bitcoin’s unique character distinct from conventional finance, the emergence of Spot Bitcoin ETFs has forged a strong link between the two realms. As a result, Bitcoin has grown more responsive to fluctuations and market sentiments in traditional financial markets.
According to an analyst’s observation, the S&P 500 Futures, Nasdaq Futures, and Dow Jones Futures have all seen a considerable drop recently, near the 1.618 Fibonacci extension levels on the weekly chart. This correlation is underscored by data showing large withdrawals from U.S.-based Bitcoin Spot ETFs. As per SosoValue’s data, these ETFs recorded $680 million in withdrawals on December 19, marking a break from 15 consecutive days of inflows.
Currently, the Bitcoin price stands at approximately $97,950, slightly above the significant support level of $96,000. Given that stock indexes are experiencing downward pressure, there’s a possibility that the Bitcoin price could mirror these trends and potentially dip to around $93,800. Afterwards, it might recover and start moving up again.
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2024-12-20 23:41