The cryptocurrency market today (11) has once again weakened, with Bitcoin retreating to around 90,000 USD for consolidation, almost completely giving back the gains from the brief rebound the previous day. Although the Federal Reserve (Fed) lowered interest rates by 25 basis points as expected and even announced a $40 billion short-term government bond purchase plan, the overall market risk appetite has weakened, leading to heavy selling pressure as 'good news is already priced in'.
Major mainstream cryptocurrencies continue to decline this week, with over $514 million in leveraged positions liquidated in the past 24 hours, causing rapid market fluctuations.
This pullback occurred after Bitcoin briefly broke through $94,000 on Wednesday. At that time, it triggered a small-scale 'short squeeze', but the bulls were unable to follow through effectively, failing to break above the upper resistance that had been repeatedly pressured over the past few weeks, ultimately being pushed back into a consolidation range near the past month.
FxPro senior analyst Alex Kuptsikevich pointed out that since November 21, there have indeed been signs that Bitcoin's local highs and lows have been gradually increasing; however, he emphasized that to confirm that the rebound has turned into actual capital growth, the overall cryptocurrency market cap must break through $3.32 trillion, about 6% more than the current market cap of $3.16 trillion.
One of the main reasons for this wave of decline is the rapid liquidation of market leverage. CoinGlass data shows that in the past 24 hours, $376 million of long positions have been forcibly liquidated, nearly three times the $138 million of short positions, and this wave of liquidation intensified rapidly after Bitcoin broke below the short-term trend line.
The overall economic situation has also failed to provide sufficient support. Although the Fed announced a rate cut as expected, decision-makers anticipate that the magnitude of rate cuts will decrease over the next two years, revealing internal divisions within the Fed regarding inflation and economic outlook, which has failed to effectively consolidate market confidence in policy direction.
QCP Capital has recently reminded clients that Bitcoin may continue to oscillate between $84,000 and $100,000 before the end of the year, due to factors including weakened market liquidity and continued imbalanced position allocation.
Bloomberg Intelligence senior strategist Mike McGlone has also warned that the 'Christmas rally' investors are hoping for may not materialize, and he even predicts that Bitcoin will fall below $84,000 by the end of this year.
The market is currently closely watching whether Bitcoin can hold the short-term support area between $90,000 and $91,000, which has been tested multiple times in the past month. If it effectively breaks below this range, it may further drop to the bottom of the range; conversely, if it can stabilize, there is hope for a renewed challenge to the pressure zone of $94,000.
"No 'Christmas rally' this year? Analyst: Bitcoin may fall below 84,000 dollars by the end of the year" This article was first published on (Block客).
