Bitcoin tumbled to $94,000 this morning, and some analysts pointed out that unless there is a significant increase in capital inflow, Bitcoin may stay around $100,000 for a longer period of time. However, the founder of 10x Research believes that this may just be a temporary consolidation phase before the bull market resumes.
Bitcoin briefly surpassed the $100,000 mark last night but was immediately met with selling pressure. After oscillating for several hours from a high of $100,424 to below $98,000, it further plunged to $94,000 at 5 o’clock this morning, with a maximum decline of 6.4%. At the time of writing, it has rebounded to $97,239, narrowing the 24-hour decline to 1.83%.
Ethereum (ETH), starting from $3,945 in the late night, also experienced a sharp drop to $3,465 in the early morning, with a maximum decline of 12%. The huge volatility has caused a bloodbath in the market, with the overall market value of cryptocurrencies evaporating nearly $200 billion in the past 24 hours, now standing at around $3.6 trillion. The GMCI Small Cap index, which represents small-cap coins, plummeted over 15%, marking one of the largest declines this year.
Opinion: Bitcoin may stay around $100,000 for a longer period of time
According to Bloomberg, the recent sell-off in the cryptocurrency market seems to cool down the euphoria among investors triggered by Trump’s election. Charlie Morris, the investment director of asset management company ByteTree, analyzed that unless there is a significant increase in capital inflow, Bitcoin may stay around $100,000 for a longer period of time.
$100,000 is a number we should get used to because we will spend time there unless capital flows increase from here.
Katie Stockton, a technical analyst at Fairlead Strategies LLC, suggested in a report to adopt a “neutral short-term” investment strategy after Bitcoin failed to stay above $100,000.
10x Research: Temporary consolidation period before the bull market resumes
Coindesk cited a report from 10x Research on Monday, indicating signs of weakening momentum in the cryptocurrency market, including declining trading volume and a large number of long-term holders taking profits. Markus Thielen, the founder of 10x Research, wrote in the report, “This may just be a temporary consolidation phase before the bull market resumes.”
However, traders should now closely monitor which positions perform well and which do not, as the rebound has entered a phase where not everything will continue to rise.
To navigate this market effectively, traders should avoid weaker niche markets and focus on their core, high-conviction positions.
QCP, a digital asset hedge fund, stated in its report on Monday morning that options traders are increasingly preparing for sideways price movements before the end of the year, profiting from previous bullish bets and potentially extending positions into early next year.
“While we remain structurally bullish, spot [prices] may fluctuate within this range for the remaining time of the holiday season.”
