After multiple attempts to break through the $100,000 mark, the price of Bitcoin experienced a 4% pullback, hitting a low of $92,785 during trading.
This drop occurred right after Donald Trump won the U.S. election, marking the largest single-day drop for BTC during this period. The monthly expiry of Bitcoin options, concerns over Trump's tariff policy, profit-taking by some investors, and outflows from ETFs together constitute multiple factors for this price decline.
Why has Bitcoin failed to hold the $93,000 mark?
After briefly falling below $93,000, the price of Bitcoin rebounded but has not been able to return above this critical level. Although there are some signs of market recovery, enthusiasm for breaking the $100,000 mark has clearly waned. The BTC price has dropped nearly 4% to $93,389, while daily trading volume surged 60% to a high of $84.84 billion.
Trump raises tariffs, Bitcoin comes under pressure
According to a Reuters report on November 26, President-elect Trump decided to impose additional tariffs on imported goods from China, Mexico, and Canada.
Following the announcement, not only did U.S. stock index futures drop sharply, but Bitcoin and the entire cryptocurrency market also faced significant selling pressure. Meanwhile, the dollar index rose 0.7% against the trend. Analysts pointed out that while Trump's move was unexpected, it is indeed in line with his consistent negotiating style.
Trump's remarks undoubtedly doused cold water on the market, especially after he appointed Scott Baichent as U.S. Treasury Secretary last weekend, which had already generated some optimism. During Tuesday's Asian early trading, both Bitcoin and altcoins saw a pullback.
However, some analysts believe that Bitcoin's recent pullback is merely a normal adjustment of the market, rather than a reversal of the trend. They point out that the market, especially the cryptocurrency market, has never been smooth sailing; volatility is its norm.
The Trump administration plans to establish a cryptocurrency advisory committee
It is worth mentioning that the Trump administration plans to establish a dedicated cryptocurrency advisory committee at the White House to be responsible for formulating strategic Bitcoin reserve policies. This news undoubtedly adds a touch of uncertainty to Bitcoin's future.
Market volatility ahead of Bitcoin options monthly expiry
With a total of $9.4 billion in Bitcoin options set to expire on Friday, the market generally expects Bitcoin's price to experience significant volatility. According to Deribit derivative data, the current put/call ratio is 0.83, with the maximum pain point at $78,000. In addition, the daily trading volume of Bitcoin options also surged 124% to $4.47 billion, while open interest increased by 2% to $42.6 billion.
Most open contracts are concentrated in call options with a strike price of $82,000 and put options with a strike price of $70,000. According to the maximum pain theory, Bitcoin's price may trend towards the range of $70,000-$82,000 in the near future.
Focus on U.S. core PCE inflation data
The core PCE data to be released on Wednesday will be one of the key events for the market this week. As an important indicator of inflation, changes in the core PCE data will directly influence the Federal Reserve's interest rate policy. Therefore, it will also have a significant impact on the U.S. stock market, Bitcoin, and the entire cryptocurrency market.
Analysts have pointed out that if the core PCE data shows growth, it may weaken hopes for a rate cut in December. This will further exacerbate market volatility and uncertainty.
Where will the price of Bitcoin go next?
After the price of Bitcoin fell below the crucial support level of $94,000, some well-known cryptocurrency analysts began to advise investors to cautiously build long positions. They believe that while the recent price drop has opened up space for $80,000, this process will not happen overnight. However, some analysts also pointed out that Bitcoin's price trend is closely related to the global M2 money supply. If this correlation continues, Bitcoin may face a significant pullback of 20-25% in the short term.
Nevertheless, some large companies continue to increase their Bitcoin holdings. For example, MicroStrategy purchased 55,000 Bitcoins on Monday, and Bernstein analysts have raised the target price of MSTR stock to over $600. Similarly, Semler Scientific also announced a new round of Bitcoin buying plans.
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