Bitcoin (BTC) sought relief after the Dec. 20 Wall Street open as a giant leverage flush continued to punish late bulls.
BTC/USD 1-hour chart. Source: Cointelegraph/TradingView
BTC price retests December lows in leverage wipeout
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD recovering past $96,000 on Bitstamp.
Still down 1.5% on the day, Bitcoin offered challenging trading conditions, but it was longs paying the price as the market revisited $92,000 lows from earlier in December.
“The cascade of support loss has indeed occurred,” popular trader and analyst Rekt Capital wrote in part of the day’s market coverage on X.
“Bitcoin is now down -15% on this pullback.”
BTC/USD 1-day chart. Source: Rekt Capital/X
Rekt Capital, who had earlier warned that Bitcoin often sees bull market corrections around six to eight weeks after breaking prior all-time highs, noted that the current dip “almost matches” a similar event from 2021.
“They tend to last a few weeks,” he continued.
“Also, there tend to be up to 4 Price Discovery Corrections at most until a Bull Market ends. This is first Price Discovery Correction in this cycle, Which means it is an optimal re-accumulation opportunity with a high probability of price reversal to the upside.”
Total crypto liquidations (screenshot). Source: CoinGlass
The latest data from monitoring resource CoinGlass put the total cross-crypto liquidation tally for the past 24 hours at $1.4 billion.
Analyzing the source of short-timeframe BTC price weakness, J. A. Maartunn, a contributor to onchain analytics platform CryptoQuant, pinned the blame on the US.
Sell-side pressure was particularly noticeable on largest US exchange Coinbase, he revealed on X.
An accompanying chart showed the so-called Coinbase premium — the difference in pricing between Coinbase’s BTC/USD pair and largest global exchange Binance’s BTC/USDT equivalent — firmly in negative territory.
BTC/USD chart with Coinbase premium data. Source: Maartunn/X
“When Coinbase Premium is negative = Just stay in the side lines, wait for the market to show signals,” fellow CryptoQuant contributor BQYoutube recommended in one of the platform’s Quicktake blog posts.
“When Coinbase Premium turns positive = Comeback to the market trade and hold.”
Bitcoin, crypto welcome lower PCE inflation print
Macro conditions meanwhile benefited from cooler US inflation data on the day.
The Personal Consumption Expenditures (PCE) index, known as the “preferred” inflation gauge for the Federal Reserve, came in below expectations at 2.4% versus 2.5%, respectively.
“While PCE inflation jumped, it jumped less than expected which provides markets with SOME relief,” trading resource The Kobeissi Letter wrote in part of an X reaction.
“Still, it's further confirmation that inflation is back on the rise. Expect a bumpy road ahead.”
Fed target rate probabilities. Source: CME Group
The result had a modest impact on market expectations for future Fed policy. Estimates from CME Group’s FedWatch Tool put the odds of another interest rate cut at the January meeting of the Federal Open Market Committee, or FOMC, at 10.7.% versus 8.6% the day prior.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
