Bitcoin continues to trade below the breached psychological level of $100,000. Amid the BTC correction, the BeInCrypto editorial team has compiled a review of the reasons for the coin's momentary weakening and the grounds for further growth.

We explain why Bitcoin fell and which factors indicate that the cryptocurrency has not exhausted its potential for positive movement in this cycle.

Why Bitcoin fell today

After successfully breaching the psychologically important level of $100,000 in early December 2024, Bitcoin entered a correction. At one point, BTC fell to $90,000, after which the cryptocurrency briefly returned to the 'hundred'. The level could not be maintained, and the coin began to fall again. As of the time of writing this review, Bitcoin is trading at $96,621. The minimum Bitcoin price in 24 hours, according to CoinMarketCap, was $94,355, and the maximum was $100,432.

According to coinglass, over the past 24 hours, long positions worth $1.76 billion have been liquidated in the cryptocurrency market amid the decline of Bitcoin. Short sellers were liquidated for $183.2 million in a day.

At Bitfinex, they believe that investors should no longer expect sharp declines in Bitcoin. Analysts at the trading platform explained their viewpoint by the decreasing pressure from sellers. According to observations by the Bitfinex team, the number of investors taking profits in the market has significantly decreased. Amid these changes, analysts expect a decrease in market volatility.

Bitcoin is falling today amid rising market tensions in anticipation of the Fed's rate decision. The consumer price index will be released on December 11. Based on its results, the regulator may make another rate decision. Recall that the Fed meeting is scheduled for December 18. As of the time of writing this review, over 85% of market participants expect another rate cut. Changes may enhance the investment attractiveness of high-risk assets such as crypto.

Why Bitcoin may continue to rise: 5 reasons

The crypto market has many prerequisites for continued growth. Let's consider them.

1. Easing of regulations. The industry has yet to recover from the euphoria surrounding the pro-cryptocurrency candidate Donald Trump's victory in the US presidential elections. The politician promises to support the development of the digital asset market. Some of his initiatives have already been implemented. For example, at the end of November, the resignation of Gary Gensler, the head of the US Securities and Exchange Commission (SEC), was announced. Under the commissioner’s leadership, the regulator conducted the largest crackdown on the financial market since 2008, which also affected the crypto industry.

In place of Gensler, Trump proposed Paul Atkins, who is loyal to crypto. Under his leadership, the regulatory pressure of the SEC on the market may significantly weaken. This may also be facilitated by transferring some of the Commission's powers to another agency, the Commodity Futures Trading Commission (CFTC). Its representatives, unlike the SEC, do not see signs of illegally issued securities in every second cryptocurrency.

2. Increasing Bitcoin shortage. The amount of free BTC on exchanges continues to decline. The shortage stems from the Bitcoin halving in 2024 and the growing interest in crypto from institutional investors amid the long-awaited launch of spot ETFs for the coin in the US. One of the largest buyers of BTC in 2024 has been BlackRock, the issuer of the most popular spot Bitcoin ETF. As of the time of writing this review, the organization has already accumulated 523,689 BTC worth $50.6 billion, or 2.4% of the cryptocurrency's issuance. In comparison, MicroStrategy, which has been purchasing Bitcoins since August 2020, holds 423,650 BTC.

In the context of the increasing Bitcoin shortage, sellers may gradually raise prices over time.

3. The growth cycle is far from over. Since halvings make BTC movements cyclical, investors may look to the historical behavior of the cryptocurrency to assess its future growth prospects. The current cycle is marked on the graph below by a black curve. Comparing Bitcoin's behavior with previous cycles indicates the presence of growth potential. If the history of previous cycles repeats, BTC could set an absolute maximum in late summer to early autumn of 2025.

4. Authorities are interested in creating Bitcoin reserves. Amid instability in the geopolitical arena, regulators are seeking alternative tools to strengthen the economy. Authorities in several countries have turned their attention to crypto for this purpose. For example, in El Salvador, regulators have been purchasing 1 BTC every day since 2022. Recall that the country was the first in the world to legalize Bitcoin. BeInCrypto's editorial team has detailed how this decision has transformed El Salvador over the past three years.

The formation of a Bitcoin reserve is being considered in the US and Brazil. There are also reports of initiatives being considered in several other countries. For example, the founder of the largest crypto exchange Binance, Changpeng Zhao, is confident that a Bitcoin reserve will eventually appear in China.

5. Bitcoin may attract new large investors. The successful investment experience of MicroStrategy in BTC has drawn the attention of market participants. The idea of investing part of the assets in crypto is on the table for the shareholders of the two largest companies: Microsoft and Amazon.

Members of the crypto community remember the explosive growth of BTC amid news of Tesla, the electric car manufacturer, purchasing cryptocurrency. If new high-profile names appear on the list of Bitcoin holders, the coin will receive another reason for positive dynamics.

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