Bitcoin Faces 7% Drop Amid Week of Potential Market Volatility; $48,000 Remains Target
Summary:
Bitcoin begins a crucial week with a sharp 7% price drop, reaching its lowest level in a week, causing the liquidation of nearly $100 million in long-positioned traders. Financial experts predict possible market fluctuation due to upcoming U.S. macroeconomic data releases and the Federal Reserve's pending interest rate policy decision. Despite the decline, Bitcoin is expected to witness new highs within the week, with a potential target of $48,000. The Federal Open Market Committee anticipates no change in interest rates this month, with possible cuts towards mid-2024. Recent data suggests a short-term price correction for Bitcoin, while optimistic Bitcoin bulls continue to target the $48,000 mark.
Bitcoin begins a crucial week with a sharp 7% price reduction as market volatility continues. The cryptocurrency went down to about $40,000, reaching its weakest point in seven days. This unexpected fall resulted in the liquidation of nearly $100 million in long-positioned traders and brought a sudden shock to Bitcoin investors. The week also potentially buzzes with triggers for further market fluctuations, emphasising data from the U.S. Macroeconomic landscape and the Federal Reserve's pending interest rate policy decision.
The market reveals that Bitcoin is now gradually settling after weeks of continuous rise. Crypto enthusiasts are waiting for unexpected turns before the year wraps up. With just a few weeks before the year ends, the Bitcoin price movement now feels more unpredictable than ever.
Bitcoin witnessed a return in volatility instantly after a quiet weekend just as the weekly market closed. This time, however, it was the bullish investors who felt the burden, as Bitcoin dropped over 7% within hours falling to $40,660 on Bitstamp including a 5% plunge takes place only in a few minutes. CoinGlass data shows that this unexpected slide wasn't a favourable outcome for leveraged long traders, racking up a tally of $86 million in liquidations for December 11th. Aggregate long position liquidations for cryptocurrencies have gone over $300 million in a single day.
With a correction around the corner, many seasoned investors expressed a sigh of relief. According to popular market analyst BitQuant, these fluctuations bear no significant implications on Bitcoin's robust nature, adding there would be new highs within the week, potentially targeting $48,000. CEO of trading firm MN Trading, Michaël van de Poppe, also urged investors to remain calm and not stress around market corrections, noting that Bitcoin momentum is gradually reaching its peak, making way for Ethereum to acquire ascendacy in the upcoming quarter.
U.S. data releases are bringing a unique chance that is purely time-sensitive. The CPI and PPI reports for November will be unveiled on December 12 and 13, immediately before the Federal Reserve decides on interest changes. While incoming data might not directly impact the policy, there is already a lot of evidence suggesting a downtrend in inflation. The Federal Open Market Committee hints at no interest rate changes for this month, with possible cuts only around mid-2024. This forecast was almost unanimously agreed to be accurate at 98.6% according to data from CME Group’s FedWatch Tool.
After the FOMC decision, a speech from Federal Reserve Chair Jerome Powell could trigger asset volatility, followed by further jobless statistics the following day.
Following the sudden fall of Bitcoin, analysts presented several early warning signals to identify future incidents like this. These indicators suggest a short-term price correction for Bitcoin.
Meanwhile, Bitcoin's latest mining difficulty adjustment ends the trend of new all-time highs. Despite initial alarm, James Van Straten of CryptoSlate reassures it holds no significant threat-for miners, but is rather a relief.
Optimistic Bitcoin bulls still target the $48,000 mark. This target is further reinforced by data showing that a large-volume Bitcoin purchase at an average of $48,050 was made by a newly identified cluster of addresses. Glassnode, an on-chain analytics firm, indicates a 633,120 Bitcoin purchase by this newly identified cluster making it the second largest yet discovered.
Published At
12/11/2023 11:33:56 AM
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