Why Bitcoin Price Is Falling Today: Is $80K Next?

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As an analyst with over a decade of experience in the financial markets, I have seen my fair share of market fluctuations and volatility. The recent dip in Bitcoin price is a stark reminder of the rollercoaster ride that cryptocurrencies can be. While it’s true that the strong institutional interest in Bitcoin has been evident, the profit-taking strategy by investors and the upcoming options expiry on Deribit exchange are causing directional uncertainty.

Lately, the decrease in Bitcoin’s value has caused worry among investors and led to intense selling across the cryptocurrency market. Furthermore, recent market events suggest that this trend might continue, with some experts forecasting a potential drop to $80K or lower. Interestingly, this occurs amidst growing institutional investment in Bitcoin, as demonstrated by MicroStrategy (MSTR) and others buying large amounts of it.

Why Is Bitcoin Price Falling Today?

Today, the price of Bitcoin has significantly dropped, causing worry across the larger cryptocurrency market. Several factors might have influenced investor feelings negatively over the past few days, leading to intense selling activity in the crypto sector.

Since Donald Trump’s election victory in November, Bitcoin (BTC) has experienced significant surges. However, these gains have also presented a chance for investors to cash out their profits. Notably, recent data from the blockchain suggests increased selling pressure on cryptocurrency. Crypto market analyst Ali Martinez recently pointed out this trend, stating that approximately 33,000 BTC, worth over $3.23 billion, has been transferred to exchanges in recent times.

This refers to a technique known as profit-taking, which traders frequently employ when the price of an asset increases. However, Santiment recently pointed out a drop in BTC following its peak at $99.8K on Christmas, fueled by optimistic sentiment among traders. The report also mentioned that speculation about BTC reaching $110K has grown due to the recent surge in price.

On the other hand, Santiment implies that historically, Bitcoin tends to reach such peaks when public anticipation is minimal. This suggests that the current dip might actually be a market correction, as overly optimistic expectations for $110K could potentially act as self-fulfilling prophecies, hindering any further price increase.

Bitcoin Options Expiry Sparks Concern

The drop in Bitcoin’s price today is connected to the upcoming expiration of the largest crypto options on Deribit exchange, worth approximately $18 billion. This event has caused some indecision about the direction of the market, as it brings increased volatility and sudden changes in DVOL (Deribit Volume Open Interest Ratio). Furthermore, financial experts have expressed concerns that the highly leveraged market could amplify any substantial price decrease, potentially leading to heightened volatility.

Significantly, Bitcoin options expiration holds the largest share of the total value, with approximately $14.27 billion due to expire. This put/call ratio currently stands at 0.69, hinting at a slightly optimistic outlook among traders. The potential resistance level could be around $85,000, as this is identified as the ‘max pain point’ for Bitcoin, which may influence its price movement if there’s a price fluctuation.

Conversely, tomorrow’s expiration of Ethereum options amounts to a staggering $3.79 billion in total value. This indicates a stronger bullish sentiment among Ethereum traders, as evidenced by a put/call ratio of 0.41. Additionally, the price level of $3,000 is considered the “max pain point” for Ethereum, which could significantly impact its price fluctuations.

BTC Dip To $80K Imminent?

Today’s Bitcoin price chart indicates a drop of approximately 3.5% to $95,175, accompanied by a decrease in trading volume by around 1.5% to $42.45 billion. It’s worth mentioning that Bitcoin reached a 24-hour peak of $99,884 and has maintained a monthly growth of 2%. Additionally, BTC Futures Open Interest decreased about 3.5%, as per CoinGlass, suggesting a bearish trend prevailing in the market.

As a researcher, I’ve noticed an intriguing trend in the market: Although institutional interest is skyrocketing, recent events seem to be dampening overall market enthusiasm. For instance, MicroStrategy’s (MSTR) stock has seen volatility due to its Bitcoin purchasing strategy, sparking speculation among investors. Furthermore, companies like KULR are now prioritizing Bitcoin accumulation.

In my latest analysis, I’ve predicted that Bitcoin could potentially dip to the range of $81,000 to $85,000. This prediction, shared by several other market experts, has sparked apprehension within the crypto market.

In relation to the drop in Bitcoin’s value below $97,300, this suggests a downward trend for cryptocurrency. Yet, if Bitcoin recovers to this significant support level and rallies towards $100K, it could potentially surge up to $168,500.

At the same time, Peter Brandt anticipates a possible drop in Bitcoin’s price to around $80,000 due to observed technical patterns. Meanwhile, well-known market analyst Tone Vays has stated that if Bitcoin’s value falls below $95,000, it raises the likelihood of a correction down to approximately $75,000.

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2024-12-26 18:32