Bitcoin plummeted to $94,000 this morning, with some analysts suggesting that unless there is a significant increase in capital inflows, 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 rose above the $100,000 level last night but was immediately met with selling pressure. After oscillating for several hours, it dropped below $98,000 in the late night hours and further plunged to $94,000 at 5 am this morning, marking a maximum decline of 6.4%. At the time of writing, it has rebounded to $97,239, narrowing the 24-hour loss to 1.83%.
Ethereum (ETH), starting from $3,945 in the late night, also experienced a sharp decline to $3,465 in the early morning, with a maximum drop of 12%. The massive volatility has caused the overall market capitalization of cryptocurrency to evaporate nearly $200 billion in the past 24 hours, currently standing at approximately $3.6 trillion. The GMCI Small Cap index, which represents small-cap coins, plummeted over 15%, marking one of the largest declines this year.
Perspective: Bitcoin may stay around $100,000 for a longer period of time
According to Bloomberg, the recent cryptocurrency sell-off seems to be dampening 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 inflows, Bitcoin may stay around $100,000 for a longer period of time.
“$100,000 is a number that we should get used to because we will be spending time here unless the funding rate can rally from here,” said Morris.
Katie Stockton, a technical analyst at Fairlead Strategies LLC, suggested in a report that a “neutral short-term” investment strategy should be adopted after Bitcoin failed to sustain above $100,000.
10x Research: Temporary consolidation phase before the bull market resumes
Coindesk cited a report from 10x Research on Monday, indicating that the cryptocurrency market is showing signs of weakening momentum, including declining trading volumes and significant profit-taking by long-term holders. 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 ones underperform, as the rebound enters a phase where not everything will continue to rise,” Thielen added.
To navigate this market effectively, traders should avoid weaker submarkets and focus on their core, high-conviction positions.
QCP, a digital asset hedge fund, pointed out in its report on Monday morning that traders in the options market 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 remain range-bound during the remaining time in the holiday season.”