Why Bitcoin Retraced
At 1 a.m. last night, the price of Bitcoin fell to as low as $95,734. As of press time, the price of Bitcoin has rebounded to $97,900. Nevertheless, the price correction is not surprising, especially when it is normal to have small fluctuations on the way to setting a new record high.
After setting new highs for several days and coming within $200 of the $100,000 mark, the price of Bitcoin has stalled and retreated from Friday's high. Initially, Bitcoin fell to $98,000 on Sunday, but bears added further pressure and the price of Bitcoin fell below $96,000. Since Friday, the market value of Bitcoin has shrunk by more than $60 billion, falling below $1.9 trillion.
Liquidation Amount Approaching $500 Million
The market volatility has hit over-leveraged traders hard. In the past 24 hours, nearly 200,000 market participants were liquidated, with a total amount of nearly $500 million. Among them, most of the liquidated positions were long positions, with a value of up to $353 million.
Titan of Crypto analyzed this phenomenon and pointed out that after Iran made retaliatory remarks against Israel, the price of Bitcoin fell rapidly. As of the time of publishing this article, the price of Bitcoin fell below $96,000, and this fluctuation affected the performance of altcoins: Ethereum fell from $3,326, DOGE fell by 11%, XRP fell by 16%, and ADA also fell by 14%.
Analysts' views on Bitcoin's decline
In a Nov. 23 X post, analyst Ali Martinez shared an interesting prediction for Bitcoin’s potential price action. He noted that the TD Sequential indicator has already issued a sell signal on Bitcoin’s 12-hour chart, suggesting that prices could fall further. If Bitcoin experiences this correction, the price could drop to $91,583 or even further to $85,610. He also said that the sell signal would only be considered invalid if Bitcoin closes above $100,535.
Peter Brandt points out consistent features of bull market cycles
Veteran trader Peter Brandt emphasized that there are two obvious patterns in Bitcoin's previous bull market cycles:
First, bull markets are usually marked by parabolic price increases, but the intensity of each rise weakens as the cycle progresses;
Second, after breaking out of a parabolic pattern, Bitcoin tends to experience a significant correction, typically falling about 80% (±5%) from its peak.
Brandt also shared Bitcoin's current parabolic trend. Although the pattern is relatively clear, the trend may change as the market develops. If this pattern is confirmed, Bitcoin's rise may continue in January. But according to the chart's prediction, there may be a larger correction in 2025.
The impact of macroeconomic events on BTC
The geopolitical situation in the Middle East has a profound impact on the performance of Bitcoin.
In early October, Bitcoin prices fell sharply after Iran launched a missile attack on Israel, once again proving that geopolitical turmoil often drives investors to traditional safe-haven assets such as gold rather than Bitcoin.
In addition, macroeconomic events in the United States continue to affect Bitcoin's price trend. Recently, the U.S. labor market has remained strong, and the latest employment report exceeded expectations, indicating that the Federal Reserve may continue to cut interest rates. Historically, lower interest rates are good for Bitcoin because investors tend to seek higher-risk assets for higher returns.
Outlook remains positive
Nevertheless, the medium-term outlook remains positive. Despite short-term volatility, historical data shows that the outlook for December is likely to continue to improve. Even in bullish trends, Bitcoin often experiences pullbacks. Considering Bitcoin's recent price action, market excitement around Trump's election, ETF inflows, and other factors, the upward trend in prices is very likely to continue.
