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bitcoin faced a sharp pullback yesterday, falling 8% from its all-time high of $108,300 after the Federal Reserve announced a 25 basis point rate cut along with revised policy calling for fewer cuts in 2025. Despite the drop, bitcoin managed to stay above $98,000. a critical liquidity level that analysts are closely monitoring.
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This recent price action raises a fundamental question: is this the beginning of a more significant correction or simply a shakeout to fuel the next stage of bitcoin's rally? CryptoQuant analyst Axel Adler provided key insight, noting that there is no substantial panic selling evident in the market, a sign that investor confidence remains intact for now.
bitcoin's resistance at current levels suggests that the market is recalibrating following the Federal Reserve's latest actions. As traders and investors digest these developments, all eyes are on whether bitcoin can regain momentum and pull back towards its previous highs or if deeper pullbacks are on the horizon. With market sentiment in play, the next few days will be crucial in determining bitcoin's next direction.
bitcoin remains strong
Despite the recent decline and a notable shift in market sentiment, bitcoin remains resilient above key liquidity levels, maintaining its long-term bullish structure. The price drop, sparked by broader market reactions to the Federal Reserve's policy announcement, has raised concerns, but bitcoin's ability to hold critical support underscores its underlying strength.
CryptoQuant Lead Analyst Axel Adler <a target="_blank" href="https://x.com/AxelAdlerJr/status/1869661208816865289″ target=”_blank” rel=”nofollow”>recently shared data aboutshedding light on current market dynamics. According to Adler, no significant panic selling is evident, even after bitcoin's sharp drop.
He highlighted a chart tracking the profit loss of short-term btc holders on exchanges, revealing that this metric is currently at a higher level than seen during the early December selling events. This indicates that the recent sell-off may have been driven less by fear and more by strategic restructuring.
This restructuring could serve to generate liquidity and provide the necessary momentum for bitcoin's current rally. However, he also warns that this could mark the beginning of a broader correction that could take time to fully develop.
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The next few weeks will be fundamental for bitcoin. As the market stabilizes, traders and investors are watching to see if bitcoin can reclaim higher levels or if further consolidation to the downside is in the cards.
Price action: technical levels to maintain
bitcoin is currently trading at $101,800, following a successful test of local demand at $98,695 today. The price structure remains intact, with bitcoin forming a clear pattern of higher highs and higher lows, indicating sustained bullish momentum. Despite the recent volatility, market sentiment remains optimistic as btc remains above critical support levels.
For bitcoin to maintain its upward trajectory, a decisive push above $103,600 is essential. This level served as an important pivot last week, marking a key zone for both buyers and sellers. Breaking this resistance would likely signal renewed momentum, setting the stage for further gains as bitcoin aims for new highs.
However, failure to break above $103,600 could cause a change in sentiment. If btc also loses the psychological level of $100,000, it would likely confirm the start of a broader correction. Such a scenario could push the price towards lower support zones as the market recalibrates.
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The next few days will be crucial in determining bitcoin's direction in the short term. Traders are closely watching the $103,600 resistance and $100,000 support levels as these thresholds will dictate whether btc continues its rally or enters a corrective phase.
Featured image of Dall-E, TradingView chart
