On December 10, Bitcoin ($BTC) faced a significant price correction after hitting $100,000. Instantly, discussions about whether 'the bull market has peaked' started to become active in the community, and voices questioning whether to take profits began to emerge.
Historically, Bitcoin has had over a 60% chance of declining in the week before and after Christmas since 2017. Is this just a normal pullback?
Bitcoin's 'healthy pullback.'
Since the approval of several large institutions' Bitcoin spot ETFs in early 2024, investor interest in Bitcoin and Bitcoin spot ETFs has reached unprecedented heights, which has been the main force driving Bitcoin's price surge this year.
Although the recent sharp correction in Bitcoin over the past two days is indeed terrifying, it is actually a 'healthy pullback.' The price of Bitcoin remains stable in the range of $90,000 to $100,000. This significant range fluctuation reflects that the market is undergoing a natural and healthy adjustment, rather than a sign of a crash.
In the past three market cycles of Bitcoin, the average interval from the first historical high (ATH) to the next peak is about 318 days. Based on this trajectory, we may still be in the process of reaching the next historical high (ATH), rather than having already peaked.
Regarding Bitcoin's four-year halving cycle, the halving effect still exists. He added that as Bitcoin matures, the overall cryptocurrency market has begun to correlate with broader macroeconomic cycles.
Christmas may hit $120,000.
Historically, Bitcoin usually experiences a significant rise within six months after the inauguration of a new U.S. president. After Donald Trump was elected in early November, he has already brought significant benefits to the market.
Trump's promise of crypto-friendly policies and Bitcoin reserves after taking office in January 2025 may continue to drive the cryptocurrency market. Therefore, the current short-term fluctuations will not affect the long-term upward trend.
In the long term, the real peak of the bull market may occur between the summer and autumn of 2025. In the short term, around Christmas 2024, there is a chance that Bitcoin could break through $120,000: 'It’s just a matter of time, not possibility.'
It may not necessarily be the time to sell at the top, but it can be seen as a warning. The recent market is unhealthy, and its final result always leads to the crash of altcoins. $100,000 for Bitcoin is a key level; if Bitcoin can break through and stabilize again, then this rebound in altcoins will not end too early. However, if Bitcoin cannot stabilize at $100,000, the outcome for altcoins may likely fall back to the starting point.
Although stablecoin-related indicators are still at relatively high levels over the past 12 months, the weekly inflow has significantly decreased from a peak of $8 billion to $4 billion.
This indicator needs to be monitored continuously. If inflows further decrease, it may indicate that the market will enter a longer period of consolidation, especially during the typically quiet Christmas holiday period at the end of the year. Even if the trend of slowing inflows may persist, we remain optimistic about the market performance in 2025. Bitcoin's price is expected to rise steadily, but the increase may moderate in the short term.
Additionally, according to data from CryptoQuant, while Bitcoin was declining, the premium on Coinbase surged.
Such pullbacks usually indicate that when a considerable number of small retail investors panic-sell, American institutional investors aggressively buy.
Here are a few points to watch: One is whether Microsoft's vote these days can pass, and the other is that Amazon shareholders have also proposed a meeting to decide whether to buy Bitcoin. Both of these represent significant increases. If one passes, Bitcoin still has potential; if neither passes, the short-term profit-taking may gradually outweigh off-exchange buying. On-chain data shows that the demand for funds is decreasing, so let's patiently wait for the outcome of the game.
This week, there is also Powell's Federal Reserve interest rate decision. Let's see what this old guy has to say. Trump is coming in, so he should give some face, leaning towards neutral.
Small-cap coins are showing signs of retreat, which is a result of sentiment reaching its peak. After some fluctuating, the retreat will accelerate. In contrast, Bitcoin and Ethereum, supported by off-exchange funds, will not see a rapid retreat, so it’s still wise to pay attention to risks.
