Bitcoin Price Drops Below $105,000 Amid Anticipation of US Federal Reserve Interest Rate Announcement
The Bitcoin price has taken a significant hit, dropping below $105,000 after reaching an all-time high of $108,365 on December 17. The short-term volatility comes ahead of the United States Federal Reserve’s interest rate announcement on December 18, which is expected to be a 25-basis-point cut.
Despite Short-Term Volatility, Bulls See Opportunities for Future Gains
In spite of the recent price drop, one crypto analyst has highlighted a bullish scenario taking shape. Long-term Bitcoin holders are positioning themselves for future gains, despite the current short-term volatility.
Bitcoin LTH Profit-Taking Drops from $10 Billion to $3 Billion
Bitcoin’s surprising 37% return in November 2024 reached a new all-time high, followed by a profit-taking frenzy. Selling pressure reached an estimated $10 billion in November, with a significant drop to $3 billion over the past three weeks.
Percival’s Analysis: Long-Term Holders Ready for Further Increases
According to Percival, a verified Bitcoin analyst on CryptoQuant, the magnitude of profit-taking has cooled down significantly. The chart below illustrates the net realized profit chart by Percival:
| Date | Profit Realized |
| — | — |
| Nov 25 | $10 billion |
| Dec 14 | $3 billion |
Percival added that this means long-term holders have realized most of their profits at this stage and are ready to see further increases.
90-Day Market vs. Realized Price Gradient Oscillator Chart
The index is in an equilibrium zone of 0.5, indicating a neutral position between buyers and sellers. This demonstrates the potential for an upward phase, as the crypto asset is neither overbought nor oversold.
| Date | Market vs. Realized Price Gradient |
| — | — |
| Dec 1 | -0.2 |
| Dec 14 | 0.5 |
Bitcoin Funding Rate Signals No Signs of Late-Cycle Overheating
According to an analyst, the Bitcoin funding rate signals no signs of late-cycle overheating.
Coinbase Premium Falls Despite Decreased Profit-Taking
Despite the positive development of decreased profit-taking and a neutral trend, it is essential to note that the Coinbase premium has been falling since the beginning of December. Yonsei Dent, a pseudonymous crypto trader, highlighted that over the past two weeks, the premium has been on a notable decline with respect to BTC prices.
Inverse Correlation: BTC Rally Not Supported by Demand from US Investors
The inverse correlation suggests that BTC’s rally was not supported by demand from US investors. The analyst added that this could indicate underlying weakness in medium-term upward momentum and recommended caution for investors.
Daan Crypto’s Expectations: Choppy Market Structure Before Breakout
Despite the choppy market structure, Daan Crypto, an independent crypto trader, said that Bitcoin had followed last year’s price action. The trader expected the price to chop further as 2024 wraps up before an actual breakout in Q1 2025.
Conclusion
In conclusion, while short-term volatility is a concern for investors, one analyst sees opportunities for future gains. Long-term holders have realized most of their profits at this stage and are ready to see further increases. The neutral trend and decreased profit-taking are encouraging signs, but the falling Coinbase premium suggests underlying weakness in medium-term upward momentum.
Related Articles
- Why is Bitcoin Price Down Today?
- Bitcoin Funding Rate Signals No Signs of Late-Cycle Overheating — Analyst
- Why is Bitcoin Price Dropping Today?
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This article is for general information purposes only and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
