Bitcoin (BTC) has found relief since the Wall Street open on December 20 as massive leverage flushes continue to punish bulls.
BTC/USD 1-hour chart. Source: Cointelegraph/TradingView
BTC price retests December lows as leverage evaporates.
Data from Cointelegraph Markets Pro and TradingView shows BTC/USD recovering above $96,000 on Bitstamp.
Bitcoin, still down 1.5% on the day, offered difficult trading conditions but took a long time to pay out as the market clawed back to $92,000 lows from early December.
“A series of support losses actually occurred,” popular trader and analyst Rekt Capital wrote in part of his market coverage of X on the day.
“With this decline, Bitcoin is now down -15%.”
BTC/USD 1-day chart. Source: Rekt Capital/X
Rekt Capital, which previously warned that Bitcoin often experiences bull market corrections of about six to eight weeks after breaking previous highs, noted that the current downtrend is “almost consistent” with similar events in 2021.
“They tend to last a few weeks,” he continued.
“There also tends to be up to four price discovery corrections by the end of a bull market. This is the first price discovery correction of this cycle, meaning it is an optimal re-accumulation opportunity with a high probability of a price reversal.”
Total cryptocurrency liquidation (screenshot). Source: Coinglass
The total amount of cryptocurrency liquidations in the last 24 hours reached $1.4 billion, according to the latest data from monitoring resource CoinGlass.
JA Maartunn, a contributor to on-chain analysis platform CryptoQuant, analyzed the cause of the short-term BTC price weakness and placed the blame on the United States.
Sell-side pressure was particularly pronounced on Coinbase, the largest U.S. exchange, he said in
The attached chart shows that the so-called Coinbase premium (the price difference between the BTC/USD pair on Coinbase and the BTC/USDT equivalent on Binance, the largest global exchange) is clearly in negative territory.
BTC/USD chart with Coinbase premium data. Source: Maartunn/X
“When Coinbase premium is negative = just sit on the sidelines and wait for the market to show a signal,” fellow CryptoQuant contributor BQYoutube recommended in one of the platform’s Quicktake blog posts.
“If Coinbase premium turns positive = return to market trading and hold.”
Bitcoin, Cryptocurrency Welcomes Decline in PCE Inflation
Meanwhile, macroeconomic conditions benefited from cooler inflation data from the US on the day.
relevant: Bitcoin whale support includes the mid-$60,000 area on a new BTC price alert.
The personal consumption expenditures (PCE) index, known as the Fed’s preferred inflation indicator, fell below expectations at 2.4% and 2.5%, respectively.
“PCE inflation surged, but less so than expected, providing some relief to markets,” trading resource The Kobeissi Letter wrote in part of X’s reaction.
“Still, it has become increasingly clear that inflation is rising again. “We anticipate a difficult road ahead.”
Fed target interest rate probability. Source: CME Group
The results had some impact on market expectations about future Federal Reserve policy. Estimates from CME Group’s FedWatch Tool put the odds of another rate cut at the January Federal Open Market Committee (FOMC) meeting at 10.7%, up from 8.6% the previous day.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.