Bitcoin (BTC) briefly plummeted below $90,000 on Monday, ringing alarm bells among investors as markets panicked. However, it quickly rebounded from this level to reach $92,500 and then climbed to its current level of $95,400. Despite the drop, BTC is up just over 1% in the past 24 hours.
Price action was mixed for other cryptocurrencies, with some registering notable increases while others dropped considerably. Ethereum (ETH) is down almost 2% in the past 24 hours and has declined nearly 14% over the past week. Tron (TRX), Stellar (XLM), Uniswap (UNI), and Litecoin (LTC) have also registered notable drops. Meanwhile, Solana (SOL), Ripple (XRP), Dogecoin (DOGE), Cardano (ADA), Sui, and Toncoin (TON) have reported a jump in prices. The crypto market cap is marginally down and currently sits at $3.28 trillion.
Bitcoin (BTC) Drop Sparks Market Crash Fears
Bitcoin (BTC)’s brief plunge below $91,000 sparked significant panic in the market about an impending price crash. BTC has been in the doldrums since its post-election peak. The drop came despite Trump promising a crypto-friendly administration and making Bitcoin a central theme of his policy. Despite the promises and initial optimism, analysts are still worried about a price crash. Alex Kuptsikevich, FxPro Chief Market Analyst, stated,
“The start of the new year has not been easy for the crypto market. The next target for the bears looks to be the $88,000 area. And in a negative scenario, bitcoin will face a quick pullback to $74,000.”
BTC and the crypto market have struggled to build momentum after December’s highs thanks to a string of positive economic indicators and updates, indicating the Federal Reserve will be less likely to reduce interest rates this year.
“Losing over 2% in 24 hours to $3.22 trillion, the market was back at the bottom of the consolidation range since the end of November. The promising start to the year failed to materialize. It is with some trepidation that we now watch the eighth or so attempt to break below $3.20 trillion. Adding to the unease is the fact that last week’s upside momentum failed to develop, only attracting sellers.”
Litecoin (LTC) Plunges After X Account Hack
Litecoin (LTC) dropped 4% as it struggled to recover from a recent hack that eroded confidence in the asset. The breach occurred when hackers compromised Litecoin’s official X account and gained access to promote a fraudulent LTC token. The hackers falsely claimed the token was a Solana-hosted initiative. While the hack did not compromise the Litecoin network, the incident has significantly amplified the bearish sentiment across LTC spot markets.
Meanwhile, Cardano (ADA) and SUI have also reported double-digit losses as traders take profits after last week’s rally. The drop indicates caution among traders as the market faces broader bearish sentiment as the release of the US CPI data looms.
Institutional Crypto OTC Volumes Doubled in 2024
Institutional Over-The-Counter (OTC) trading volumes registered a jump of 106% in 2024, driven by Donald Trump’s US election victory and growing demand for spot crypto ETFs. The fourth quarter saw the largest jump, with Bitcoin (BTC), Ethereum (ETH), and stablecoin trading volumes rising 80%, 187%, and 191% year-on-year.
“Although comprehensive regulatory clarity is still pending, the pro-crypto stance of the Trump administration significantly fueled Q4 crypto spot trading to 2024 highs.”
The second quarter registered a 110% year-on-year increase, which Finery Markets attributed to the launch of spot Bitcoin ETFs. The growth in institutional crypto OTC volumes is due to TradFi financial leaders shifting their stance from skepticism to neutrality.
MicroStrategy Purchases Additional Bitcoin
MicroStrategy has added another 2,530 BTC to its reserves, according to an 8-K filing with the Securities and Exchange Commission (SEC). The company acquired its latest tranche of the asset for $243 million, putting the average price of each BTC around $95,972. The latest acquisition marks the tenth consecutive week the company has acquired BTC. MicroStrategy intends to raise $42 billion by 2027 through convertible debt offerings and at-the-market stock sales to fund further BTC purchases.
However, analysts are divided about MicroStrategy’s BTC acquisition strategy. Some have raised concerns about the long-term sustainability of its debt and equity-fueled purchases. Financial analyst Jacob King warned of the risks, stating,
“MicroStrategy’s business model is a giant scam and relies on a reflexive loop: it issues debt or equity to buy BTC, which drives BTC’s price higher. This increases MSTR’s market cap, boosts its index weight, and attracts more sheep investors. With a higher valuation, it issues more equity to buy even more BTC. The cycle only works if BTC keeps rising. If BTC stalls or crashes (which it will), the loop collapses. This is unsustainable and is a giant Ponzi..”
Bitcoin (BTC) Price Analysis
Bitcoin (BTC)’s outlook remains bullish despite briefly dipping below $90,000 on Monday. Analysts explained that BTC’s recent price action is driven by the strengthening dollar, supported by the Federal Reserve’s hawkish stance and concerns about Tariffs. However, despite macroeconomic challenges, the outlook for the flagship currency remains structurally bullish, according to Grayscale’s research director, Zach Pandl. Pandl believes recent price action could temporarily halt BTC. However, the upcoming presidential inauguration could create positive momentum in the market.
Analysts are relatively optimistic about BTC in 2025. Steno Research predicts it will reach new all-time highs thanks to a favorable regulatory environment, leading to more institutional adoption. BTC faced significant selling pressure on Monday, as seen in the price chart, with the asset struggling to build momentum after dropping below the 20 and 50-day SMAs. BTC was bullish during the first week of the new year, going above the 20 and 50-day SMAs on Friday (January 3). The price registered marginal increases on Saturday and Sunday, settling at $98,309. BTC started the previous week on a bullish note, rising almost 4% to go above $100,000 and settling at $102,228.
Source: TradingView
However, market sentiment changed on Tuesday as BTC fell below the 50-day SMA after a drop of over 5% and settled at $97,019. The price fell below the 20-day SMA on Wednesday, dropping to an intraday low of $92,546 before recovering to settle at $95,121, dropping almost 2%. Sellers retained control on Thursday as the price fell 2.53% to $92,710. Buyers returned to the market on Friday as BTC registered an increase of over 2%. However, it could not move beyond the 20-day SMA and ultimately settled at $94,818. The weekend saw BTC register a marginal decline on Saturday and a marginal increase on Sunday to settle at $94,585. BTC crashed on Monday, dipping below $90,000 as it fell to an intraday low of $89,397.
However, it recovered from this level to reclaim $90,000 and move to $94,492. The current session sees BTC marginally up as buyers look to reclaim $95,000 and move towards $100,000.
Ethereum (ETH) Price Analysis
Ethereum (ETH) briefly slipped below $3,000 on Monday as markets plummeted following fears of a price collapse. ETH had begun a recovery during the first week of the new year, as its momentum carried it beyond the 20 and 50-day SMAs. As a result, the price crossed the crucial $3,500 level on Friday and rose to $3,657 on Saturday. However, it registered a marginal decline on Sunday to end the weekend at $3,634. ETH picked up on Monday, rising 1.46% to $3,687. Despite a positive start to the week, ETH plummeted on Tuesday, dropping over 8% to go below the 20 and 50-day SMAs and settled at $3,381. The price dropped to an intraday low of $3,217 on Wednesday but recovered to settle at $3,327.
Source: TradingView
Sellers retained control on Thursday as ETH dropped just over 3% to $3,220. Buyers returned to the market on Friday as ETH registered an increase of 1.45% and moved to $3,267. The weekend began with ETH experiencing volatility on Saturday as buyers and sellers struggled to establish control. Buyers ultimately gained the upper hand as ETH registered a marginal increase and moved to $3,283. However, it dropped on Sunday to end the weekend at $3,266. The ETH price collapsed on Monday as it plummeted to an intraday low of $2,930, slipping below the 200-day SMA. It recovered from this level to reclaim $3,000 and settle at $3,137, ultimately registering a drop of almost 4%. The current session sees ETH up 1.34% and trading around $3,179 as buyers attempt to reclaim lost ground and push the price towards $3,500.
Solana (SOL) Price Analysis
Solana (SOL) reached an intraday high of $223 last Monday as it attempted to move past the 50-day SMA. However, with sellers active at this level, it lost momentum, dropping over 7% to $202 on Tuesday. The price continued to fall on Wednesday, slipping below the 20-day SMA to an intraday low of $188 before recovering and settling at $197, above the 20-day SMA. Selling pressure intensified on Thursday as SOL slipped below the 20-day SMA after a drop of over 6% and settled at $185. Buyers returned to the market on Friday, pushing SOL to an intraday high of $193 before settling at $187.
Source: TradingView
SOL experienced considerable volatility over the weekend as buyers and sellers struggled to establish control. Buyers ultimately gained the upper hand as SOL registered marginal increases on Saturday and Sunday to end the weekend at $188. Markets turned bearish on Monday as SOL dropped to an intraday low of $169, briefly going below key support levels and the 200-day SMA. However, it recovered from this level to reclaim $180 and settle at $182, ultimately registering a drop of almost 3%. The current session sees SOL up 2.33% as buyers look to push it above the 20-day SMA and $200. SOL must first cross the resistance at $190 for this to happen.
Ripple (XRP) Price Analysis
Ripple (XRP) is defying market trends as it looks to push toward $3 after finding support at the 20-day SMA. XRP had moved past the 20-day SMA on January 1 and reached an intraday high of $2.47 by Friday (December 3). However, it lost momentum over the weekend, dropping 1.35% on Saturday and 0.90% on Sunday to settle at $2.39. XRP could only register an increase of 0.92% on Monday before dropping over 6% on Tuesday and settling at $2.27. XRP recovered on Wednesday, thanks to the 20-day SMA acting as a dynamic support level, rising 4.48% to $2.37. The price fell back on Thursday, dropping just over 4% to $2.27.
Source: TradingView
XRP was back in positive territory on Friday, registering an increase of 3% and moving to $2.34. Bullish sentiment registered a substantial increase on Saturday as XRP surged over 10%, moving beyond the $2.50 resistance level and settling at $2.57. However, it lost momentum on Sunday, dropping almost 3% to end the weekend at $2.50. Early selling pressure pushed XRP to an intraday low of $2.33 on Monday. It recovered from this level to register an increase of almost 1% and settle at $2.52. The current session sees XRP marginally up as buyers look to push towards $2.80 and $3.
Arbitrum (ARB) Price Analysis
Arbitrum (ARB) has been trading in a downward trajectory since losing momentum after reaching an intraday high of $0.956. As a result, ARB dropped nearly 11% on Tuesday, slipping below the 50-day SMA and settling at $0.82. ARB slipped below a key support level on Wednesday, dropping just over 4% to go below the 20-day SMA and settle at $0.787. Selling pressure intensified on Thursday as ARB fell almost 6% to $0.743.
Source: TradingView
Buyers attempted a recovery on Friday as ARB rose to an intraday high of $0.774. However, it lost momentum after reaching this level and settled at $0.747, ultimately registering only a marginal increase. Bearish sentiment returned over the weekend as ARB dropped 0.55% on Saturday and nearly 2% on Sunday, settling at $0.730. The current week began with ARB remaining in the red, falling almost 4% to $0.702. ARB is up just over 1% during the ongoing session, rebounding from the $0.70 support level.
Filecoin (FIL) Price Analysis
Filecoin (FIL) slipped below a key support level on Monday as its recent bearish trajectory continues. FIL slipped below the 50-day SMA on Tuesday after registering a drop of almost 11% and settling at $5.35. The price continued to drop on Wednesday, falling over 4% to go below the 20-day SMA and settle at $5.11. FIl attempted a recovery on Thursday but could not go past the 20-day SMA. Sellers ultimately retook control and pushed the price down 1.40% to $5.04. FIL recovered on Friday, rising over 3% to $5.21. Despite the positive momentum, FIL could not go past the 20-day SMA.
Source: TradingView
Sellers returned to the market over the weekend as FIL registered a marginal drop on Saturday and a drop of 2.20% on Sunday to settle at $5.08. Selling pressure intensified on Monday as FIL slipped below $5 and settled at $4.92, but not before settling at $4.63. The current session sees FIL up almost 3% as buyers look to keep the price above $5. FIL is presently trading around the $5.05 level.
Injective (INJ) Price Analysis
Injective (INJ) has been bearish since the previous week, dropping over 8% on Tuesday after failing to move beyond the 50-day SMA. Sellers retained control on Wednesday as INJ fell by 8.11% to go below the 20 and 200-day SMAs and settle at $21.88. The price continued to drop on Thursday, dropping almost 4% and settling at $21.07. Despite the bearish pressure, INJ recovered on Friday, rising by 2.40% to $21.58. However, it could not go past the moving averages and was back in the red on Saturday, dropping just over 1% to $21.34.
Source: TradingView
INJ continued to decline on Sunday, dropping below $21 after declining 2.45% and settling at $20.82. The price plummeted to an intraday low of $18.56 on Monday as selling pressure intensified. However, INJ recovered from this level to settle at $20.10, ultimately registering a drop of 3.44%. The current session sees INJ up over 3% as buyers look to push it towards the resistance at $22.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
+ There are no comments
Add yours