Journalist
Posted:
Selling pressure on Bitcoin was at its highest level in three years, a recent AMBCrypto showed. Aggressive taker selling activity drove the downtrend in recent weeks, following the 10/10 crash.
Spot ETF flows were also consistently negative. It reflected extremely weak sentiment in crypto, especially as risk appetite declines towards the end of the year when volatility is expected to increase.
A Bitcoin is expected in the short term [BTC] price drop towards $82,000, before rising to $95,000. This is based on Friday’s mammoth Expiration date of options. The ETF flows and selling pressure underlined a lack of demand.
What should traders expect from Bitcoin price action?
Source: Root on X
In one message on Xchain analyst Root showed that Bitcoin was trading around its fair value on-chain. This statistic takes into account the realized capitalization, the destroyed mint days and the liquid supply statistics.
By the metric, Bitcoin has been largely overvalued since March 2024. By the end of 2024, the price entered heavily overvalued territory.
The current decline to fair value is not automatically a buying opportunity. Analyst Axel Adler Jr explained that the short-term holding market reached a rare moment of pressure equilibrium.
The measure fell to the bottom 5% of the distribution, indicating equal buying and selling pressure among short-term holders.
This only happened in 5.8% of all 3-year observationswhich represents how the market is trying to gauge the next trend direction.
The liquidation heatmap highlighted the $83.5k and $94.7k as nearby magnetic zones of notable size. The $90k-$92.7k was also a liquidity cluster to watch.
Source: BTC/USDT on TradingView
The 1-day chart showed that December price action did not show a steady trend. At the time of writing, the internal structure was bearish.
A price drop to the $84k liquidity position is made more likely due to the bearish structure.
The Fibonacci retracement levels showed that a move past $101.7y and $107.5k was needed to turn investor bias bullish.
Overall, Bitcoin price action would likely continue sideways over the next week, with near-term volatility due to options expiration.
Final thoughts
- Bitcoin price action remained bearish, although near-term buyer-seller pressure was now balanced.
- A rise towards $94k-$97.2k would provide a selling opportunity, following the bearish swing move from $107k to $80.6k in November.
Disclaimer: The information presented does not constitute financial advice, investment advice, trading advice or any other form of advice and is solely the opinion of the writer