Bitcoin did not break through the $100,000 mark as the market hoped, peaking at $99,588 before turning downward. BTC fell to around $90,791 at its lowest, but the price has since rebounded and is fluctuating above $92,000.
Why has BTC been unable to break through the psychological barrier of $100,000 for so long, and where does the selling pressure come from?
Long-term Bitcoin holders are selling into the market at a rate of 366,000 coins per month, reaching the highest level since April 2024, as profit-taking gradually occurs.
After Bitcoin's major correction, will it continue to slide or will it attempt to breach the $100,000 mark again after a brief pause?
In times of market uncertainty, pay attention to the following 4 important data points!
1. Bitcoin spot ETF data remains quite strong.
Since early November, Bitcoin spot ETF data has only decreased on 5 days, while net inflow occurred on 11 days, with a daily average net inflow exceeding $600 million.
Currently, the total inflow of Bitcoin spot ETFs has reached $30.16 billion, remaining strong!
2. The total market value of stablecoins continues to reach new historical highs.
The total market value of stablecoins has reached a historical high of $189.91 billion, with USDT's market value rising strongly from $120.4 billion in early November to $132.5 billion, an increase of $12.1 billion in less than a month.
The changes in the total market value of stablecoins represent the size of capital inflows. Although the market has fluctuated in recent years with capital coming in and out, it is difficult to be pessimistic when we broaden our perspective.
3. The minutes from the Federal Reserve's November meeting were released, and hopes for a rate cut in December remain!
Since Powell's hawkish stance, the market has remained skeptical about a rate cut in December. The minutes from the Federal Reserve's November meeting were released early this morning.
The content worthy of attention includes:
1. Most committee members still believe that a 25 basis point rate cut in December is appropriate.
2. The assessment of downside risks to the baseline forecast for economic activity has been lowered.
3. Continuing to reduce the balance sheet is appropriate.
4. If inflation continues to increase, rate cuts may be paused.
5. If the unemployment rate continues to rise or the economy slows down, rate cuts may accelerate.
The content of the minutes was within expectations, so the probability of a 25 basis point rate cut in December remains high. There is no need to panic too much over Powell's remarks, as the accompanying rate cuts and increased liquidity will gradually flow into the crypto market, which will be a long-term benefit.
4. Both Bitcoin and Ethereum contract open interest have reached historical highs.
Today, the total open interest of Ethereum contracts across the network has surpassed $21.5 billion, reaching $21.508 billion, setting a new historical high, with a 24-hour increase approaching 6%.
On November 22, the total open interest of Bitcoin contracts across the network exceeded $64 billion, setting a historical high, but today it has fallen back to $61.79 billion.
Since July of this year, Bitcoin contract open interest has been continuously rising, breaking through $20 billion and hovering around $30-$40 billion, ultimately surpassing $60 billion in November, as market sentiment gradually becomes optimistic.
Will this Bitcoin major correction continue to decline?
From a technical perspective, Bitcoin may again test the liquidity area near the psychological level of around $90,000, and is expected to consolidate in the short term.
This is because Bitcoin has risen from the bottom without a significant adjustment; such rapid increases are usually accompanied by subsequent corrections to balance supply and demand. Therefore, Bitcoin may consolidate or pull back to previous support levels or lower to digest the previous gains.
Moreover, with the Relative Strength Index (RSI) falling below 50 for the first time since November 6, it is expected that sellers will dominate price movements over the next week, which could lead to Bitcoin prices consolidating below $95,000 for a period.
Currently, the overall trend remains, and there is no need to worry about BlackRock launching Bitcoin ETF (IBIT) options. The market response has been enthusiastic, trading volume is active, open interest is steadily increasing, and the possibility of a rate cut in December along with continued capital inflow into the market all indicate that investors still expect Bitcoin to rise in the future.
In summary, I believe this is a healthy correction; although it is under pressure in the short term, the long-term outlook remains bullish! This correction provides an opportunity to digest previous gains, which also gives us the chance to seize the last wave of dividends; a retest and accumulation will help us go further and healthier!
On the altcoin side: the opportunity to buy low has arrived!
Currently, Bitcoin has entered an adjustment cycle, and this is a good time to accumulate some altcoins that haven't significantly increased; this also presents an opportunity for us to enter. Altcoins that surged earlier should also experience a notable adjustment during this period, while those that haven't risen much will likely see a wave of catch-up. Personally, I think this will be the rhythm.
Currently, on the altcoin side, we can focus on some targets that haven't seen much catch-up. Recently, the blockchain gaming sector has shown strong performance, with SAND achieving nearly a 3x increase in just a few days. We can pay attention to related tokens in the blockchain gaming sector, as there is a high probability of catching a wave of catch-up. If the tokens you hold haven't increased much, do not frequently switch without certainty; those that need to rise will provide rotation opportunities!
