Bitcoin Shows Cat Bounce Sign

Bitcoin began to lose value on Sunday despite high signs of recovery on Friday. The digital asset is still down 2% for the day with market capitalization struggling to stay above $1.09 trillion, and its dominance over the altcoins has increased to 55% as most altcoins suffer badly.

 

The pioneer digital asset had a run over the last few weeks, setting a new record high above $100,000 on the daily chart. But the market hasn’t been able to maintain its bullish momentum over the last few days, dropping below $100,000 and as low as $92,000.

In the short term, a more significant correction towards the $90,000 level and possibly the $85,000 support zone may be anticipated if the bulls can’t regain this area quickly. It appears more difficult to predict the price action when looking at the 4-hour time frame.  Although the market experienced higher highs within an ascending channel, it was rejected from the channel’s upper boundary at the $108,500 level.

ETFs, finally caught up to the overall decline in the cryptocurrency market.   Bitcoin futures ETFs saw a $680 million net outflow on December 19. This was the biggest outflow day and the first net outflow in fifteen days. The biggest withdrawal was from Fidelity’s  ETF, which saw $208.55 million depart.

The BTC and GBTC funds of Grayscale experienced withdrawals of $188.6 million and $87.86 million, respectively, while Bitwise’s BITB completed the four biggest withdrawals with a $43.61 million loss. While there were no inflows or outflows from Blackrock’s IBIT, Wisdomtree’s BTCW drew in $2.05 million despite the large outflow.

Historically, a period of notable growth has followed each Bitcoin correction. Bitcoin’s current price of $96K is a sign that last week’s correction is nearing its peak. However. analysts continue to exercise caution because future developments will rely on investor responses and market stability.

Bitcoin correction offered opportunities for astute investors even though it initially appeared concerning. The bull run in Bitcoin has resumed, and analysts are still upbeat about the cryptocurrency’s long-term prospects, projecting new highs in 2025.

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ABOUT THE AUTHOR See More
Olumide Adesina
Olumide Adesina
Financial Market Writer
Olumide Adesina is a French-born Nigerian financial writer. He tracks, analyzes, and reports changes in financial markets with over 15 years of working experience in investment trading.
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