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Arslan Butt•Friday, December 20, 2024•2 min read
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Thursday saw a notable retreat in the bitcoin market as Bitcoin (BTC) dropped 4.8% over 24 hours below $96,000 before recovering to $97,000. The decline follows unusually hawkish remarks by Federal Reserve Chair Jerome Powell on interest rate decreases in 2025.
Bitcoin and Crypto Market React to a Hawkish Fed
With the CoinDesk 20 Index falling over 10%, the sell-off has been especially extreme in the larger bitcoin market. With big tokens like Ethereum ETH/USD declining 10.8% to below $3,500 and others including Cardano ADA/USD, Chainlink LINK/USD, and Avalanche [[AVAX/USD]] suffering losses between 15-20%, alternative cryptocurrencies (altcoins) bore the most of the downturn.
Data from CoinGlass shows about $1.2 billion worth of crypto derivatives positions being cleared within 24 hours, therefore the market volatility has set off significant liquidations in leveraged positions. More over $1 billion of these were long holdings, suggesting an optimistic attitude before to the drop.
Institutional Action and Market Dynamics
Institutional interest in Bitcoin BTC/USD is strong even with the present dip of the market. Major Bitcoin mining business MARA has bought $1.5 billion worth of Bitcoin over the past two months, so boosting its overall holdings to 44,394 BTC. Supported by convertible notes, this aggressive accumulation approach reflects great institutional confidence in Bitcoin’s long-term future.
With Allo getting a $100 million credit facility secured by Bitcoin, illustrating the growing integration of Bitcoin into conventional financial structures, the wider market is also seeing increasing institutional participation.
BTC/USD Technical Analysis
BTC/USD
Technical indicators, especially John Bollinger’s own Bollinger Bands study, point to Bitcoin’s possible orientation toward yet another upward surge. Touching the upper Bollinger Band, the recent price action could indicate an approaching “walk up” pattern, hence maybe resulting in new all-time highs.
BTC Price Predictions
Industry analysts have offered differing future price forecasts for Bitcoin:
- Mauricio Di Bartolomeo of Ledn projects Bitcoin to reach $132,500, equivalent to 50 ounces of gold
- Robert Kiyosaki has set a target of $350,000 by 2025
- More ambitious forecasts from Perianne Boring suggest $800,000 based on the stock-to-flow model
- PlanB predicts an average valuation of $500,000 across 2025, with potential peaks reaching $1 million
Market Outlook
Though notable, the present adjustment seems to be a normal consolidation following Bitcoin’s recent climb beyond $100,000. As co-founder of Morph Azeem Khan notes, “when you zoom out and consider the year-over-year growth, a pullback like this feels healthy.”
The way the market responded to the Fed’s cautious rate decrease projections emphasizes how still macroeconomic events affect crypto prices. Strong institutional engagement and technical indicators, however, point to a short decline in the present with possible ongoing upward momentum in 2025.
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.
His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.
His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
