Beyond the technical factors driving the cryptocurrency higher, Trump’s decision to appoint Paul Atkins, a pro-crypto figure, to lead the SEC supports a long-term bullish outlook for Bitcoin.
In contrast, Jerome Powell’s statement that Bitcoin should not compete with the US dollar is expected to have a more limited impact.
While these developments drove Bitcoin to a new record high yesterday, sellers took control of the market later in the day.
The pullback that began during the US session transitioned into a recovery as Asian trading commenced, reminiscent of earlier days in the cryptocurrency market.
This 10% decline quickly wiped out accumulated long positions, with data showing around $300 million in long positions and $400 million in futures liquidated within minutes.
The latest outlook suggests Bitcoin will face challenges around the $100,000 mark. A significant portion of the sell-off seems driven by accumulation in crypto futures, but market disturbances also contributed during the week.
One such disturbance arose from Mt. Gox resuming BTC transfers, which caused fluctuations during the summer. As Bitcoin reached all-time highs, concerns grew that transfers exceeding $2 billion might lead to sales.
Additionally, Meitu, often referred to as China’s MicroStrategy, decided to liquidate its crypto assets, selling over 900 BTC. This move highlights institutions turning toward profit-taking.
Interest in Bitcoin has surged in Asia recently. With accelerating fund flows into the crypto market, consolidation within the cryptocurrency sector may continue in the coming days.
The recent downturn threatens to negatively impact the upward trend, despite appearing as an adjustment in futures positions.
Another Bitcoin-related development involves the debate over creating a Bitcoin reserve in the US, with some deeming it unnecessary. Former Treasury Secretary Lawrence Summers dismissed the proposal as “crazy.”
Trump’s Bitcoin reserve project excited crypto investors, though its realization seems unlikely. Investors, however, expect the US to avoid selling its Bitcoin holdings during Trump’s tenure. This would exert considerable pressure on Bitcoin, especially at current price levels.
Trump’s presidential victory positively influenced Bitcoin throughout November, but by month’s end, this effect seemed complete.
In December, a slower news cycle might lead to sideways Bitcoin movement, with investors holding on for new developments.
With the market focusing on the US, the Fed’s anticipated 25 basis point rate cut this month may help maintain current levels. However, volatility could rise once Trump assumes office in January.
It’s crucial to prepare for unexpected developments. Monitoring Bitcoin’s short-term support and resistance levels is essential.
The Bitcoin chart shows sideways movement since November 22. Yesterday’s sudden price movements can be disregarded as they lack support from daily closes, although they align with Fibonacci levels.
We continue observing Bitcoin’s upward trend that began in September. During this period, the $92,400 level served as a crucial resistance with a Fib 2.618 value and later became support. Subsequently, the $99,000 level appeared as intermediate resistance. The initial move beyond this resistance extended to the Fib 3.618 value at $104,997.
Currently, the $99,000 mark remains the nearest resistance for Bitcoin. Daily closes above this point will prompt close monitoring of the $105,000 level for potential price breakout. In technical terms, the horizontal trend in the short term has reduced the energy of the Stochastic RSI, potentially paving the way for new advances above $100,000 in the coming days.
The volume of these purchases will determine the trend’s sustainability. However, recent rapid price movements suggest that surpassing $105,000 this month is unlikely. A fresh wave of positive news could quickly alter this perspective.
On the downside, we can track the average level of $95,500 as intermediate support. Daily closes below this threshold will open the door for pullbacks toward stronger support at $92,400.
From a broader perspective using the weekly chart, Bitcoin maintains its long-term upward trend, with the $105,000 region serving as a critical limit. If the current oscillation since 2023 persists, attempts to reach $105,000 in the short term may encounter selling pressure, potentially pushing Bitcoin into a price cycle that could extend toward $85,000.
In summary, Bitcoin’s short-term limits appear to be within the $92,400 to $105,000 range. As market volatility increases, these levels will likely be tested. Clear daily breaks of these support and resistance lines will play a crucial role in determining the new direction.
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