BUY LIGHTCHAIN HERE 
The Bitcoin price experienced a significant slide recently, dropping over 10% from its record high just above $108,000 reached earlier this week. The cryptocurrency reached a low of $95,564 on Thursday, reflecting the broader impact of reduced expectations for looser US monetary policy on speculative trading.
Analysts Attribute Bitcoin Price Dip To ‘Year-End Profit-Taking’
Strahinja Savic, head of data and analytics at FRNT Financial, noted that such corrections are “pretty typical” during crypto bull markets. The Federal Reserve’s (Fed) hawkish stance, articulated in its recent rate cut announcement, has influenced most risk assets, including Bitcoin.
Despite this pullback, the Bitcoin price remains up nearly 50% since pro-crypto Donald Trump was elected president on November 5, signaling a sustained interest in the digital asset and notable proposals including establishing a strategic Bitcoin reserve for the US.
Market analysts suggest that the correction may be a result of “year-end profit-taking” activity from investors rather than any fundamental shifts. Edward Chin of Parataxis emphasized that there was no specific catalyst for the selloff, stating, “It looks like some year-end profit taking.”
Chris Weston, head of research at Pepperstone Group, advised caution in the short term. He indicated that while a price collapse is not imminent, the momentum behind Bitcoin’s rally appears to have diminished, with buyers losing control over recent price movements.
Weston explains that this cautious sentiment has led many traders to adjust their strategies to reflect a more conservative approach as the market navigates this volatile period.
Critical Support Levels In Focus
Despite the recent downturn, there are signs of resilience within the Bitcoin market. Crypto analyst Ali Martinez highlighted that in December alone, over 74,000 Bitcoin have been withdrawn from exchanges, suggesting a strong belief among investors in the cryptocurrency’s long-term potential.
This trend indicates that many holders are choosing to keep their assets off exchanges, which could bolster Bitcoin’s price prospects for future appreciation as 2025 approaches.
Market sentiment is also shifting among traders. A recent analysis of trading positions on Binance revealed that 62.17% of traders shorted Bitcoin at its peak of $108,000. However, as the Bitcoin price dipped below $96,000 on Thursday, sentiment flipped, with 55.44% opting for long positions instead.
However, Martinez also cautioned that if the Bitcoin price fails to hold above $96,000, the next key levels to watch would be $90,000 and $85,000. He pointed out a critical support zone between $98,830 and $95,830, where approximately 1.09 million wallets purchased over 1.16 million Bitcoin.
According to the analyst, this Bitcoin price range serves as a crucial buffer, as many investors have significant stakes in this price band.
At the time of writing, BTC is trading at $97,560, posting losses of over 4% in the 24-hour time frame and 3% in the week.
Featured image from DALL-E, chart from TradingView.com
