Bitcoin has experienced significant price movements over the past few days, influenced by macroeconomic developments and market fundamentals.
Following the Federal Open Market Committee (FOMC) meeting and a speech by Federal Reserve Chair Jerome Powell, the price of Bitcoin Dropped quickly below $99,000.
However, the leading crypto quickly recovered, Climbing back to $104,000 Earlier today before settling at $100,573 at the time of writing. This represents a decrease of 3.4% from the previous day and a decrease of about $67 billion in its market cap valuation.
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Exchange transactions reached record lows
In the midst of this price performance, the cryptoquant analyst known as WomanQ provided insight In Bitcoin market activity, highlighting declining exchange transaction volumes.
According to WoominQ, historical data suggests a correlation between transaction volume spikes and significant price movement. For example, peaks in exchange transactions coincide with dramatic Bitcoin price increases in 2017 and 2021.
However, recent data shows a marked decline in the volume of transactions on both Spot and Derivative ExchangeReflects reduced business activity compared to previous years.
This decrease, according to CryptoQuant analysts, could signal “declining market share,” suggesting a “period of consolidation or reduced volatility” in the near term.
Bitcoin key support levels and technical insights
The market intelligence platform IntoTheBlock has Put the light on At an important support zone forming just below the $100,000 mark. Data shared by the platform shows that more than 1.45 million BTC were collected at an average price of $97,500.
This rally has established an important demand zone, potentially serving as a “buffer” against further price declines. The importance of this level lies in its ability to provide a foundation Price stabilityEspecially as the Bitcoin market navigates its current phase of correction.
It is suggested that a breach below this zone could create further downward pressure, while placing above it could boost recovery efforts.
Meanwhile, from a technical perspective, insights shared by market analyst Satoshi Wolf highlight the fragile nature of Bitcoin’s current price levels. The cryptocurrency recently tested the $100,000 support, aligned with the 100-day exponential moving average (EMA).
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This level is important because it associates technical indicators with psychological significance. The Moving Average Convergence Divergence (MACD) indicator shows Bearish momentumWhile the Relative Strength Index (RSI) is near the oversold region, which indicates the possibility of a price reversal.
Wolff suggests that traders watch for a confirmed breakout above $104,000 or a break below $100,000, with volume confirmation being the key to validating either.
📊 $BTC Analysis: The chart shows a recent pullback after a strong uptrend, suggesting potential profit taking. Price is testing the 100,000 support, aligned with the 100 EMA, an important level to watch.
If it holds, a bounce back to the 104,000 resistance is possible. MACD… pic.twitter.com/smLaqsr2Tz
— Satoshi Wolf (@satoshiwolf) December 18, 2024
Featured image created with DALL-E, chart from TradingView
