Top 3 Reasons Why Bitcoin Price Crash Will End Soon

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As a seasoned researcher with over a decade of experience in the financial markets, I have seen my fair share of market volatility and price swings. The recent Bitcoin crash, while surprising, is not entirely unexpected given the rapid growth we’ve witnessed in the past few months.

Today, Bitcoin’s price stands at approximately $94,650, representing a 12% drop from its record high of $108,421. This sudden descent has left investors taken aback, as it erased over $1 billion in positions. However, these three factors may indicate that the Bitcoin crash could be nearing its end. Let’s delve into what might happen next for the world’s largest cryptocurrency and the broader crypto markets.

Three Reasons Why Bitcoin Price Crash Could Ends Soon

In light of this sharp downturn, the crucial query becomes, “When might this downtrend conclude?” Here are three potential reasons why Bitcoin’s decline may cease in the near future:

  1. BTC techncials suggest that a key support level could absorbe the selling pressure and retire the bears.
  2. According to Santiment, short-term BTC holders are in loss and are less likely to sell now and realize losses.
  3. Whales that sold Bitcoin before the drop have accumulated 10,o00 BTC between December 19 and 22.

Bitcoin Technicals Hint Strong Support

From November 11 to December 11, about 68% of all trading activity took place between $90,900 and $100,000. Despite Bitcoin’s price moving beyond this range to reach an all-time high of $108,421, the Federal Reserve’s hawkish remarks caused a 15% decline in Bitcoin’s price. This drop established a recent low at $92,230 on December 20. However, it’s possible that this downtrend could continue until Bitcoin finds a solid foundation. The value area low of $90,900, where 68% of the trading volume was transacted between November 11 and December 11, is considered a potential support level. Given its historical significance as an area of high demand, there’s a good chance it could help absorb selling pressure and potentially bring an end to the current Bitcoin correction.

As a researcher, I find myself pointing towards an intriguing prospect: The Bitcoin price indicators suggest that the $100,000 mark might be the next significant hurdle. Overcoming this could potentially set the stage for the $102,700 to $105,300 daily imbalance as the next resistance zone. It’s only after surmounting these two obstacles that Bitcoin could pave its way towards new record highs.

BTC Holders Unlikely to Sell At Loss

Based on information from data provider Santiment, the Market Value to Realized Value (MVRV) indicator for Bitcoin indicates that a significant further correction might not be imminent. The MVRV currently stands at approximately -4.17%, indicating that investors who bought Bitcoin within the past month are experiencing an average loss of 4.17%. Generally, when the MVRV ranges between -10% and -20%, short-term holders tend to sell off their positions, and Bitcoin is often transferred to long-term holders.

Given the current situation, it’s possible that a small dip could take place, but a significant decrease seems very unlikely because Bitcoin has already fallen by 18%. This perspective aligns with the previously discussed technical analysis.

Whales Accumulate BTC On Dips

In a span of approximately four days, from December 19 to December 22, large Bitcoin investors (often referred to as ‘whales’) have amassed around 10,000 Bitcoins. This data comes from Santiment. This trend seems consistent with both the technical analysis and short-term holder perspective, which hint that the current downturn might be nearing its end.

What’s Next For BTC?

Overall, Bitcoin’s future may brighten up soon, even after showing a significantly bearish trend over the past week. The important support levels at around $90,900 or $90,000 will play a crucial role in determining Bitcoin’s direction next. Consequently, it’s essential for investors to closely monitor these levels as they could trigger either a recovery surge or a period of consolidation.

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2024-12-23 15:10