Just as Bitcoin seemed to be stabilizing, the cryptocurrency market shifted downward unexpectedly. Although December’s pricing mechanisms were initially based on January’s FUDs, everything changed upon learning that the High Court would announce its decision on tariffs earlier than expected, on Friday. On-chain alarms quickly alerted investors to this development.
Cryptocurrency Alarm Bells
An on-chain analyst, known as anlcnc1, had highlighted an average cost level of $98,800 hours before. For BTC’s rally to continue, it was pivotal to return to the cost region of short-term holders. However, news about the High Court overturned this scenario, driving the BTC price further into lower dips rather than back into the STH cost region.
This critical zone was vital for short-term investors to become more enthusiastic and participate in the upswing. Yet, until it breaks permanently, every rise could still be interpreted as a precursor to an impending decline.
Although the Binance BTC/Stablecoin Reserve Ratio showed improvement, it began to reverse again. The continuation of BTC’s upward trend depends on this signal supporting the rise, yet things are turning downward once more.
“Binance BTC/Stablecoin Reserve Ratio is currently at 1.28. A rise above 1.50 would create a much more positive outlook. In summary, historically, transitions from Stablecoin to Bitcoin at the lowest levels continue.”
The on-chain analyst, anlcnc1, had warned of this downturn even before it began.
$95,000: A Significant Barrier
BTC was already facing strong selling pressure at $95,000, exacerbated by the shift in news flow. While drafting this article, BTC pulled back to $91,500, nearing a $3,000 daily loss with altcoins selling off even faster. DaanCrypto’s heat map highlighted a strong liquidation potential up to $98,000. Since the price trend turned downward, the liquidation motivation might target the expanding liquidity cluster toward $85,000.
The upcoming days will bring the following developments:
- January 7 – preliminary employment data.
- January 9 – comprehensive U.S. employment report for December.
- January 9 – High Court’s Customs Tariff decision.
- Next week – U.S. inflation report.
- By January 15, MSCI to announce the reclassification of crypto reserve companies as funds.
In short, high volatility lies ahead, and at present, volatility is not in favor of the bulls.
