Bitcoin (BTC) hit flash volatility after the Dec. 17 Wall Street open as new all-time highs preceded a snap downturn.
BTC/USD 1-hour chart. Source: Cointelegraph/TradingView
Bitcoin erases open interest with red candle
Data from Cointelegraph Markets Pro and TradingView confirmed BTC/USD reaching its highest-ever levels before diving over $2,000 in minutes.
The retracement sent the pair back to near the daily open, where it circled $106,000.
Eyeing likely support levels, onchain data platform Whalemap revealed key areas of accumulation by large-volume holders.
“More than 150k BTC of whale accumulations at $98,133 according to whale bubbles,” the Whalemap team reported in a post on X, referencing one of their proprietary analytics tools.
“Should be a support on the way down.”
BTC/USD whale clusters. Source: Whalemap/X
The downturn pierced what had previously been record high open interest (OI) of over $70 billion. Data from monitoring resource CoinGlass showed around $1.3 billion in positioning eradicated.
Exchange Bitcoin futures OI (screenshot). Source: CoinGlass
“It's becoming increasingly difficult to find reasons to be bearish on Bitcoin's spot price,” trading firm QCP Capital commented in its latest post to Telegram channel subscribers.
“However, the options market offers a note of caution, with a continued skew toward puts over calls even as spot continue to make new highs—perhaps signaling a preference for hedging rather than aggressively chasing the rally.”
Taking a longer-term view, popular trader trader Josh Rager was among those unfazed by price action.
“Stop freaking out about every pullback for the entire crypto market whether $BTC, $ETH, $SOL, memes etc,” he reacted.
“It's healthy. Everything should be higher over the next 3 to 6 months. Now until summer in 2025 should be the time to be exposed.”
BTC price dip could wipe “multiple weeks of upside”
While many expected upside continuation to take Bitcoin toward $120,000, popular trader and analyst Rekt Capital warned that the time may have come for a deeper correction.
The reason, he told X followers on the day, was historical precedent.
“It's Week 7,” a post summarized, referring to the time BTC/USD has spent in price discovery since breaking its old all-time highs.
“In 2013, Bitcoin pulled back in Week 7 of Price Discovery. In 2017, Bitcoin retraced -34% in Week 8 of Price Discovery. In 2021, Bitcoin pulled back -16% in Week 6.”
Rekt Capital added that the timing of the pullback was comparatively unimportant.
“It's more important to be prepared for when it does occur,” he reasoned.
“Because when it does occur, it will wipe out multiple weeks of upside in the process.”
Bitcoin bull market drawdowns. Source: Glassnode
Onchain analytics firm Glassnode offers a comprehensive overview of Bitcoin’s bull market drawdowns across price cycles.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
