Bitcoin price is trading at $94,650 today, down 12% from its all-time high (ATH) of $108,421. The speed of the recent crash has shocked investors by wiping out over $1 billion worth of positions. But these three reasons suggest that the BTC crash may be coming to an end. Let’s explore what’s next for the world’s largest cryptocurrency and other cryptocurrency markets.
Three Reasons Why the Bitcoin Price Crash May End Soon
With such a dramatic crash, an important question is: “When will the crash end?” There are three main reasons why BTC can end its decline quickly:
BTC technical indicators suggest a key support level that can absorb selling pressure and enable shorts to exit.
Santiment said short-term BTC holders are at a loss and are less likely to sell now and realize their losses.
Whales who sold Bitcoin before the crash accumulated 10,000 BTC between December 19 and 22.
Bitcoin technicals suggest strong support
The consolidation from November 11 to December 11 showed that 68% of the volume occurred between $909,000 and $100,000. Although the BTC price broke out of the above range and hit a high of $108,421, the hawkish comments from the Federal Reserve triggered a 15% plunge in the price of Bitcoin. The decline created a local bottom at $92,230 on December 20, but the selling may continue until BTC finds stable support. Such strong support is the support level of the value area low of $909,000. This area is the lower limit of 68% of the volume between November 11 and December 11, and is usually an area of strong demand. Therefore, there is a high chance that it will absorb the selling pressure and end the ongoing Bitcoin crash.
In this case, the Bitcoin price prediction suggests that the high price of $100,000 is the next critical hurdle. Breaking this barrier will make the daily imbalance of $1,027,000 to $1,053,000 the next resistance zone. Only by breaking these two barriers can BTC set new highs.
BTC holders are unlikely to sell at a loss
According to on-chain data provider Santiment, the 30-day market value to realized value (MVRV) indicator suggests that further strong corrections are unlikely. MVRV hovers around -4.17%, which indicates that investors who bought BTC in the past month have lost an average of 4.17%. Typically, -10% to -20% is an opportunity zone where short-term holders capitulate and BTC moves to long-term holders.
Therefore, a small drop is possible, but considering that BTC has already fallen by 18%, a major drop is highly unlikely. This outlook is consistent with the technical outlook mentioned above.
Whales are hoarding Bitcoin as the price falls
According to data from Santiment, Bitcoin whales accumulated 10,000 BTC in just four days between December 19 and 22. This outlook fits with the technical and short-term holder scenarios, both of which suggest that the ongoing crash may soon end.
What’s Next for BTC?
All in all, despite the massive bearish outlook for Bitcoin over the past week, its outlook may soon improve. The psychological support level of $909,000 or $90,000 will be key in determining where BTC moves next. Therefore, investors must keep a close eye on the aforementioned level as it could initiate a recovery rally or a consolidation phase.
