Bitcoin has recently shown signs of weakness after several weeks of soaring, but Mike McGlone, a senior commodity analyst at Bloomberg, stated that this is just a normal pullback. Matrixport believes that the $90,000 to $95,000 range could become an excellent retracement area, potentially laying the groundwork for a new round of increases in 2025.
(Background: Bitcoin monthly demand surges, supply runs low; meme coin $WEPE pre-sale achieves great results)
(Additional context: This Friday, the “largest ever” $14 billion Bitcoin options expiration is expected, cautioning against market volatility)
Since Trump’s victory in early November, Bitcoin has surged for several weeks. However, after breaking through $108,000 on the 17th and setting a historical high, the price began to decline continuously. Bitcoin is currently priced at $94,360, having dropped nearly 12% in the last seven days.
Bloomberg Analyst: Just a Normal Pullback
Regarding the recent decline in Bitcoin, Mike McGlone published an analysis on the 23rd, stating that the current market pullback is not limited to Bitcoin; gold and other risk assets have also seen declines. The larger drop in Bitcoin is due to its higher volatility, but for Bitcoin, it is “just a bit of normal reversion.”
Mike McGlone noted that unlike Bitcoin, the S&P 500 index has not experienced any significant pullbacks in the fourth quarter of this year. Bitcoin’s volatility is about three times that of the S&P 500. However, while the S&P 500 has not seen a 10% pullback since the fourth quarter of 2023, this trend is unlikely to continue into 2025.
Has Bitcoin/Gold Peaked? Just a bit of normal reversion in stretched risk assets may be what peaking #Bitcoin/#gold is sniffing out, and the crypto is among the riskiest.
That the S&P 500 hasn’t had a 10% drawdown since 4Q23 is unlikely to be sustained in 2025, if history is a… pic.twitter.com/oZas9mw1q3
— Mike McGlone (@mikemcglone11) December 23, 2024
Matrixport: Bitcoin Pullback May Fuel 2025 Rebound
Matrixport stated that after Bitcoin surged over 40% in 30 days, it typically enters a consolidation phase. The current price has dropped about 5% from a month ago. Historical data shows that after similar increases, Bitcoin often experiences pullbacks, consistent with past cycle patterns. In a bull market, a 10% to 20% pullback from recent highs usually creates an ideal re-entry zone.
For example, if Bitcoin pulls back from its high of $108,000 to the $90,000 to $95,000 range, this could become an excellent retracement area. As long as the price remains within a 20% pullback range and continues the current cycle trend, it is expected to lay the groundwork for a new round of increases in 2025.
#Matrixport Today – 12/24: #Bitcoin Pullback Range May Fuel 2025 Rebound #Matrixport #MarketAnalysis #MarketTrends #CryptoInvestment #CryptoFinance #BTC pic.twitter.com/bwdpx4qqfq
— Matrixport Official Chinese (@Matrixport_CN) December 24, 2024
$20 Billion Options Expiration This Friday
Singapore-based crypto investment firm QCP Capital reminded that after last week’s washout, spot prices continue to fluctuate sideways as the Christmas holiday approaches. Although the market appears calm this week, all eyes are on the upcoming large-scale options expiration event this Friday, with nearly $20 billion in nominal value of Bitcoin and Ethereum options set to expire.
QCP Capital pointed out that this figure accounts for nearly half of the total open interest in Deribit options. After the options expiration, typical quarter-end volatility sell-off phenomena are likely to reappear, especially if spot prices continue to fluctuate within this range and options sellers continue to roll their short positions.
Unlike those options sellers who must wait for the expiration to release collateral, call options buyers may have already rolled most of their positions in advance.
However, QCP Capital stated that if Bitcoin can successfully break through the $100,000 mark, volatility may remain stable. At the same time, as Bitcoin continues to hover below $100,000, altcoins may begin to gain momentum again.
A month ago, when Bitcoin was trading at these levels, ETH/BTC rebounded from the support level of 0.032, and a similar trend was observed at that time. Currently, Bitcoin’s market share remains at 58%, and QCP Capital is closely monitoring whether this ratio will significantly decline to confirm whether funds are flowing from Bitcoin to altcoins.
