A spike up to $104,000, followed by a plunge down to $92,000 all happened in just one day for the Bitcoin ($BTC) price. Huge volatility on Thursday left more than 158,000 liquidated to the tune of $873 million. What’s next for Bitcoin?
Massive volatility liquidates traders
Massive volatility on Thursday caught many traders unawares. From almost touching $104,000 early on Thursday, the price went sideways for the next 12 hours before a dip over the next few hours that went below $100,000.
However, what was to come caused panic among traders, as within the space of a few minutes the price plunged spectacularly from $99,000, all the way down to $92,000, liquidating the vast majority of long positions as it did so.
A precipitous nosedive
Source: TradingView
The hourly time frame for $BTC shows just how precipitous the nosedive in the price was on Thursday. Not many would have foreseen such a sharp descent in the price, and therefore breached liquidation levels all the way down to $92,000 would have wiped out most traders in long positions.
Interestingly, the wick down stopped at the ascending trendline which stretches all the way back to the double top of the 2021 bull market. This trendline has now become a very important support level.
Heavy buying from U.S. Spot Bitcoin ETFs
Thursday’s price shenanigans would not have been caused by the continued heavy purchases of BTC by the U.S. Spot Bitcoin ETFs. The ETFs bought big again on Thursday with a total of 7.58K more BTC purchased. More than this was actually bought by the IBIT Blackrock ETF, which bought 7.62K BTC, but this was in the face of a big sale of 1.51K by Grayscale’s GBTC fund.
Trump is pivotal for crypto fortunes
While demand remains extremely positive, the regulatory environment for crypto in the United States just keeps on getting more benign. After Paul Atkins was nominated by president in waiting Donald Trump for the Chair of the Securities and Exchange Commission (SEC), former PayPal COO David Sacks was then nominated for the post of Head of AI, and Crypto Czar.
Incoming president Donald Trump has been pivotal in this about face in the fortunes of crypto in the United States. He has said that he wants to make the US the crypto capital of the world, and by putting crypto-friendly figures into the key jobs in his new administration, he is certainly backing this statement.
Ascending trendline gains importance
Source: TradingView
The monthly chart for Bitcoin shows how important the ascending trendline is. The Bitcoin bulls will be looking to keep the price above this trendline by the end of the month, and a move above the 1.618 Fibonacci, making this support, would be the next target. Overhead, the 2.618 at $155,000 is a target possibility going into 2025.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
