Why is Bitcoin Price Dropping Today?
Bitcoin price is currently down more than 2%, falling to a low of $92,941 on Sunday. BTC has now reversed course and is trading above $93,000. “After a general post-Christmas market decline, the cryptocurrency market has seen an encouraging trend with whales moving stablecoins to exchanges,” Santiment reported.
Historically, the fourth quarter has been a strong period for Bitcoin and altcoins, consistent with market cycles. We are currently going through a cooling-off period, which is common after halving events, as will happen in 2024. Following the halvings in previous years (2012, 2016, and 2020), Bitcoin experienced a significant rebound in the following year.
External factors such as global liquidity and government actions also affect markets. Janet Yellen recently announced Since the U.S. is set to hit its debt ceiling in mid-January, money printing and quantitative easing are likely to increase. This creates favorable conditions for assets such as Bitcoin.
Looking ahead, January is expected to be a fairly quiet month, with the real action starting in February. Historically, March tends to be a strong month, followed by consolidation in April and May due to tax filing season. After that, the market is likely to pick up again in the summer and continue into the fourth quarter.
What’s next for Bitcoin?
Currently, Bitcoin is in a range and has not completely collapsed, but it is reacting to support and resistance levels. If Bitcoin holds below the $94,270 resistance, we may see more downside with a price target around $91,400.
However, if Bitcoin breaks through the resistance at $94,270, it could signal a change in direction. But for now, the price is still showing signs of weakness and we are watching any move below support to confirm further declines.
