Bitcoin's correction has extended into a second day after BTC price dropped below $93,600 on December 3. However, market data shows that many investors are still inclined to buy the dip, reflecting the continued optimism in the community.
While some traders may be adjusting their short-term targets and taking profits, Bitcoin appears to be consolidating after a strong 39% rally in November. After last month’s $26,000 surge and reaching what many traders consider a psychologically important $100,000 level, the current consolidation phase could provide Bitcoin with an opportunity to build a clear market structure, with specific support and resistance levels. This would be a healthy next step for the market.
BTC/USD 4-hour price chart | Source: TRDR.io
Bitcoin prices fell sharply on December 3, partly due to the psychological impact of South Korean President Yoon Suk Yeol announcing martial law, which was withdrawn just hours later. On South Korean exchange Upbit, Bitcoin prices fell below $65,000 due to a lack of liquidity, while on Binance, Bitcoin prices remained stable at nearly $95,000.
However, despite this temporary negative impact, many positive developments have been taking place, adding momentum to the market. On December 2, MicroStrategy announced the purchase of an additional 15,400 Bitcoins worth $1.5 billion, at an average price of $95,976 per BTC. On the same day, MARA Holdings, a publicly listed Bitcoin mining company, announced plans to issue $800 million in convertible bonds, with the proceeds expected to be used to purchase more Bitcoins.
One factor that could potentially boost Bitcoin prices in the near term is the December 10 vote by Microsoft shareholders on whether to add Bitcoin to the company's balance sheet. Additionally, there are rumors that the US and several Middle Eastern countries are considering creating strategic Bitcoin reserves.
Another important factor is the strong interest in spot Bitcoin ETFs, which saw inflows of $3.38 billion between November 21 and 25, according to data from SoSoValue. Despite outflows of $138 million last week, December started with three consecutive days of inflows exceeding $100 million per day.
Bitcoin ETF Spot Net Inflow | Source: SoSoValue
These factors show that although the Bitcoin market is undergoing a short-term correction, fundamentals still support the long-term prospects of the world's largest cryptocurrency.