Bitcoin faced a sharp retreat yesterday, falling 8% from its all-time high of $108,300 after the Federal Reserve announced a 25 basis point rate cut alongside revised policy indicating more fewer cuts in 2025. Despite the fall, Bitcoin managed to hold above $98,000, a critical liquidity level that analysts keeping a close eye.
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This recent price action raises an important question: is this the start of a more significant correction or just a shakeup to fuel the next phase of Bitcoin's rally? CryptoQuant analyst Axel Adler provided key insights, noting that there is no significant panic selling in the market – a sign that investor confidence remains intact for now.
Bitcoin exchange rate at current rates suggesting that the market is rebalancing after the Fed's latest moves. As traders and investors ponder these developments, all eyes are on whether Bitcoin can bounce back and push back to previous highs or trends deeper in the horizon. With market sentiment hanging in the balance, the coming days will be crucial in determining Bitcoin's next move.
Bitcoin is still strong
Despite the recent decline and apparent shift in market sentiment, Bitcoin remains resilient above key liquidity levels, maintaining its long-term bullish structure. The drop in prices, caused by broader market reactions to the Federal Reserve's policy announcement, has raised concerns, but Bitcoin's ability to maintain critical support underscores its fundamental strength.
CryptoQuant Chief Analyst Axel Adler recently shared data on Xshedding light on current market dynamics. According to Adler, no major panic selling is in sight, even after Bitcoin's sharp decline.
He pointed to a chart tracking BTC's short-term profit loss to exchanges, indicating that this metric is currently at a higher level than seen during early December sell-off events. This suggests that the recent sell-off may have been less fear-driven and more of a strategic shake-up.
This shake-up could generate liquidity and provide the necessary momentum for the continued accumulation of Bitcoin. However, he also warns that this could mark the start of a wider correction that could take time to fully develop.
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The coming weeks will be very important for Bitcoin. As the market stabilizes, traders and investors are watching to see if Bitcoin can regain higher levels or if a lower consolidation is on the cards.
Price Action: Technical Levels to Hold
Bitcoin is currently trading at $101,800, after a successful test of local demand at $98,695 earlier today. The price structure remains intact, with Bitcoin forming a clear pattern of higher highs and lower lows, indicating a steady upward trend. Despite recent volatility, market sentiment remains positive as BTC holds above critical support levels.
For Bitcoin to maintain the upward trajectory, a decisive push above $103,600 is necessary. This level was an important medium last week, marking a key area for both buyers and sellers. A break through this resistance would likely signal a new trend, setting the stage for further gains as Bitcoin looks to new highs.
However, failure to break above $103,600 could result in a shift in sentiment. If BTC also misses the $100,000 psychological level, it will likely confirm the start of a broader correction. Such a situation could move the price to lower support zones as the market rebalances.
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The next few days will be crucial in determining the near term path of Bitcoin. Traders are keeping a close eye on the $103,600 resistance and $100,000 support levels, as these thresholds will determine whether BTC continues its rally or enters a correction phase. .
Featured image from Dall-E, chart from TradingView
