In rather unseemly fashion, Bitcoin (BTC)’s journey to a new all-time high of $108,268 was followed by an estimated 17% drop that pushed the asset’s price to a local low of $92,281.
This sharp drop in prices has been attributed to the recent monetary policy announcement by the US Federal Reserve, which adopted another 25 basis point rate cut at its last FOMC meeting. While the interest rate cuts are bullish signs for the cryptocurrency market, the Federal Reserve also revealed intentions to reduce its initially projected four rate cuts in 2025 from four to just two, triggering a large-scale dump of assets. risk on the part of investors.
As expected, the significant drop in BTC price raises doubts about the future of the asset, especially in regards to the current cryptocurrency bull run.
There is nothing to fear yet, says an analyst
In a December 20 X post, popular crypto market expert Burak Kesmeci shared that Bitcoin is still far from a bear market, indicating that the asset has not yet reached the peak of the bull cycle. Using four critical simple moving averages, SMA21, SMA50, SMA200, and SMA365, Kesmeci has gained important insights into the value of Bitcoin. current market situation.
To begin with, the analyst notes that the leading cryptocurrency has fallen below its SMA21 at $99,565. However, this development has little impact on Bitcoin’s immediate future, as the SMA21 can easily be influenced by any price breakout.
On the other hand, the SMA50 currently at $91,803, has a significant influence on Bitcoin’s short-term price momentum. If the market bulls are able to maintain a daily or weekly close above the price level, it bodes well for price appreciation.
Notably, BTC has been on an upward trend since early October. During this period, the inaugural cryptocurrency has risen from $60,200 to over $108,000. Commenting on the viability of this bullish trend, Kesmeci states that Bitcoin’s distance from its SMA200 and SMA365 indicates that the asset’s bullish structure remains intact.
This is because the bottom of any long-term trend in the Bitcoin market is determined when the price falls below either SMA. In conclusion, Kesmeci tells BTC investors that there is nothing to fear despite the price drop over the past week. The analyst claims that corrections of even 20% and 30% are normal based on historical data from any previous bull run.
Bitcoin Price Overview
At the time of writing, Bitcoin is trading at $97,354 following a slight recovery from its previous drop over the past day. Meanwhile, the asset’s daily trading volume has increased by 7.35% and is valued at $103.92 billion.
Featured image from Nairametrics, chart from Tradingview.com
