Bitcoin (BTC) continued to decline on Monday, temporarily dropping below $92,000 on profit-taking, before recovering yesterday and today and now trading at $93.7K on the first day of the year with most of the world’s exchanges closed for holidays.
Expectations of continued decline until February
Some traders see the current price action continuing into February, weeks after US President-elect Donald Trump takes office and begins implementing his new policies that could impact the market.
“We suspect significant volatility at the start of the new year, especially as funding has stabilized,” traders at Singapore-based QCP Capital said on a Telegram channel. “The average yield in January (3.3%) is relatively similar to December’s (4.8%), and we can expect prices to remain within this range in the near term before starting to move from February.”
Traders also noted that options flows reflect similar expectations, with lower volatility in near-term contracts and increased demand for March call options, especially after a large purchase of options (120k-130k) last Friday. This reflects traders’ expectations of a rise in Bitcoin prices in March.
Bitcoin closes negative despite big yearly rise
Bitcoin ended December with a loss of 2.95%, its worst December monthly performance since 2021, as retail investors and long-term holders liquidated their positions after a staggering 117% year-to-date surge.
In the same context, the Chicago PMI data showed an economic slowdown in the United States, which increased pressure on the market, which shows a link to economic data.