In a rather inconspicuous move, Bitcoin (BTC)’s trip to a modern all-time high of $108,268 was followed by an estimated 17% decline, pushing the asset’s price to a local low of $92,281.
This significant price decline is attributed to the recent policy announcement by the US Federal Reserve, which adopted another 25 basis point interest rate cut at the last FOMC meeting. While interest rate cuts are bullish signals for the cryptocurrency market, the Fed also revealed its intention to reduce its originally projected four rate cuts in 2025 from four to just two, triggering a wide-scale outflow of risky assets by investors.
As expected, the significant decline in the BTC price raises questions about the future of the asset, especially in relation to the ongoing cryptocurrency bull market.
The analyst says there is nothing to worry about yet
In Post X from December 20popular cryptocurrency market expert Burak Kesmeci said that Bitcoin remains far from a bear market, which indicates that the asset has not yet reached the peak of the bull cycle. Using four key plain moving averages: SMA21, SMA50, SMA200 and SMA365, Kesmeci gained critical insight into Bitcoin’s situation current market condition.
For starters, the analyst notes that the top cryptocurrency has fallen below the SMA21 at $99,565. However, this development has little impact on Bitcoin’s immediate future as the SMA21 can be easily affected by any price breakout.
On the other hand, the SMA50 currently at $91,803 has a significant impact on Bitcoin’s short-term price dynamics. If market bulls manage to maintain the daily or weekly close above the price level, it will be a good omen for price appreciation.
It is worth noting that BTC has been in an upward trend since the beginning of October. During this period, the pristine cryptocurrency rose from $60,200 to over $108,000. Commenting on the feasibility of this uptrend, Kesmeci states that Bitcoin’s distance from its SMA200 and SMA365 indicates that the asset’s bullish structure remains intact.
This is because the bottom of any long-term trend in the Bitcoin market is established when the price falls below either of both SMAs. In conclusion, Kesmeci tells BTC investors that they have nothing to fear despite the price drop last week. The analyst states that corrections of as much as 20% and 30% are normal based on historical data from previous bull markets.
Bitcoin price overview
At the time of writing, Bitcoin is trading at $97,354 after recovering slightly from its earlier decline the previous day. Meanwhile, the asset’s daily trading volume increased by 7.35% and is valued at $103.92 billion.
Featured image from Nairametrics, chart from Tradingview.com
