Bitcoin has seen significant price movements in recent days, largely influenced by macroeconomic developments and market fundamentals.
After the Federal Open Market Committee (FOMC) meeting and a speech by Federal Reserve Chairman Jerome Powell, the price of Bitcoin has dropped significantly below $99,000.
However, the major crypto quickly bounced back, back to $104,000 earlier today before we set $100,573 at the time of writing. This represents a 3.4% decrease over the previous day and a decrease of approximately $67 billion in its market cap valuation.
Related Reading
Transactions of exchange Hit Lower register
Amidst this price performance, a CryptoQuant analyst called Woominkyu provided vision into Bitcoin market activity, highlighting the declining exchange trading volume.
According to Woominkyu, historical data shows a correlation between trading volume spikes and significant price movements. For example, peaks in exchange transactions coincided with significant increases in Bitcoin prices in 2017 and 2021.
However, recent data shows a significant decline in trade volume for both spot and derivative exchangesreflecting less trading activity compared to previous years.
This decrease, according to the CryptoQuant analysis, may reflect “declining market participation,” suggesting “a period of consolidation or reduced volatility” in the short term.
Bitcoin Key Support Levels and Technical Insights
IntoTheBlock has a market intelligence platform light on an important support area that is just below the $100,000 mark. The data shared by the platform indicates that more than 1.45 million BTC were collected at an average price of $97,500.
This accumulation has established a large demand zone, which may act as a “buffer” against further price reductions. The importance of this level lies in its ability to provide a foundation for price stabilityespecially since Bitcoin is navigating the current phase of a market correction.
It is suggested that a break below this range may encourage more downward pressure, while holding above may increase recovery efforts.
Meanwhile, from a technical point of view, an insight shared by market analyst Satoshi Wolf highlights the critical nature of Bitcoin's current price levels. The cryptocurrency recently tested the $100,000 support, aligning with the 100-day Moving Average (EMA).
Related Reading
This level is extremely important because it combines technical indicators with psychological meaning. The Moving Average Convergence Divergence (MACD) indicator shows bearish momentumwhile the Relative Strength Index (RSI) is approaching overvalued territory, indicating the possibility of a price reversal.
Wolf recommends that traders watch for a confirmed break above $104,000 or a breakdown below $100,000, with volume confirmation being the key to determining either.
📊 $BTC Analysis: The chart shows a recent pullback after a strong rally, suggesting profit taking. Price is testing the 100,000 support, aligning with the 100 EMA, a key level to watch.
If it holds, a bounce back to the 104,000 resistance is possible. MACD… pic.twitter.com/smLaqsr2Tz
– Satoshi Wolf (@SatoshiWolf) December 18, 2024
Featured image created by DALL-E, Chart from TradingView
