After several weeks of soaring, Bitcoin has recently shown signs of weakness. However, Mike McGlone, a senior commodity analyst at Bloomberg, stated that this is merely a normal pullback. Matrixport believes that the range of $90,000 to $95,000 could serve as an excellent retracement zone, potentially laying the groundwork for a new wave of increases in 2025.
(Background: Bitcoin’s monthly demand has surged, and supply is in critical condition; the presale of meme coin $WEPE has achieved remarkable results.)
(Background information: This Friday, the “largest ever” $14 billion Bitcoin options expiry is set to take place, cautioning against potential market volatility.)
Since Trump’s victory in early November, Bitcoin has surged for several weeks. However, after breaking through $108,000 and hitting an all-time high on the 17th, the price has begun to decline. Currently, Bitcoin is priced at $94,360, having dropped nearly 12% in the past seven days.
Bloomberg Analyst: Just a Normal Pullback
Regarding the recent decline in Bitcoin, Mike McGlone analyzed on the 23rd 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 attributed to its higher volatility, but for Bitcoin itself, it is merely “a bit of normal reversion.”
McGlone pointed out that unlike Bitcoin, the S&P 500 index has not experienced any significant pullbacks in the fourth quarter of this year. The volatility of Bitcoin is approximately three times that of the S&P 500. Nevertheless, although the S&P 500 has not seen a 10% drawdown since the fourth quarter of 2023, this trend is unlikely to persist in 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. Currently, the price has dropped about 5% from a month ago. Historical data shows that after similar surges, Bitcoin often experiences pullbacks, consistent with past cycle patterns. In a bullish market, a 10% to 20% retracement from recent highs usually forms an ideal re-entry zone.
For instance, if Bitcoin pulls back from its peak of $108,000 to the range of $90,000 to $95,000, this could represent an excellent retracement area. As long as the price remains within a -20% retracement range and continues the current cycle trend, it is likely to lay the foundation for a new wave of increases in 2025.
#Matrixport Today – 12/24: #Bitcoin Retracement 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 Expiry on Friday
Singapore-based crypto investment firm QCP Capital reminded that after experiencing a washout last week, spot prices continued to oscillate sideways as the Christmas holidays approach. Despite the market appearing calm this week, all eyes are focused on the large-scale options expiry event set for Friday, during which nearly $20 billion in nominal value of Bitcoin and Ethereum options will expire.
QCP Capital noted that this figure accounts for nearly half of the total open interest on Deribit options. After the options expiry, it is highly likely that typical end-of-quarter volatility sell-offs will reappear, especially if spot prices continue to fluctuate within this range and options sellers keep rolling their short positions.
Unlike those options sellers who must wait for the expiry to release collateral, call options buyers may have already rolled most of their positions in advance. However, QCP Capital indicated that if Bitcoin can successfully break through the $100,000 threshold, volatility may remain stable. At the same time, as Bitcoin continues to hover below $100,000, there may be a resurgence of altcoins trying to catch up.
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 then. Currently, Bitcoin’s market share remains at 58%, and QCP Capital is closely monitoring whether this ratio will significantly decrease to confirm whether capital is flowing from Bitcoin to altcoins.
