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Bitcoin has seen significant price movements in the past few days, largely influenced by macroeconomic developments and market fundamentals.
After the Federal Open Market Committee (FOMC) meeting and Federal Reserve Chairman Jerome Powell’s speech, the price of Bitcoin fell sharply to below $99,000.
However, the leading cryptocurrency quickly rebounded, rising again to $104,000 earlier in the day before settling at $100,573 at the time of writing. This represents a decline of 3.4% compared to the last day and a decrease of about $67 billion in market capitalization valuation.
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Exchange transactions reached record lows
Amidst this price performance, a CryptoQuant analyst known as Woominkyu came forward Visions In Bitcoin market activity, highlighting the decline in exchange transaction volume.
According to WoMinQ, historical data indicates a relationship between large spikes in transaction volume and large price movements. For example, the peak in exchange transactions coincided with the significant spikes in Bitcoin prices in 2017 and 2021.
However, recent data shows a marked decline in transaction volumes on both spot and derivatives exchanges, reflecting lower trading activity compared to previous years.
This decline, according to a CryptoQuant analyst, may indicate “a decline in market participation,” indicating a “period of consolidation or reduced volatility” in the near term.
Bitcoin Key Support Levels and Technical Insights
IntoTheBlock’s market intelligence platform Highlight It is in an important support area forming just below the $100,000 mark. Data shared by the platform reveals that more than 1.45 million Bitcoins have been accumulated at an average price of $97,500.
This buildup has created a large demand zone, potentially serving as a “buffer” against further price declines. The importance of this level lies in its ability to provide the basis for price stability, especially as Bitcoin navigates its current phase of market correction.
Expectations indicate that a break below this area may lead to further downward pressure, while remaining above it may enhance recovery efforts.
Meanwhile, from a technical perspective, insights shared by market analyst Satoshi Wolf highlight the critical nature of current Bitcoin price levels. The cryptocurrency recently tested the $100,000 support level, which is in line with the 100-day Exponential Moving Average (EMA).
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This level is considered pivotal because it combines technical indicators with psychological importance. The Moving Average Convergence Divergence (MACD) is showing downward momentum, while the Relative Strength Index (RSI) is approaching the oversold zone, indicating a possible price reversal.
Wolf suggests that traders watch for a confirmed break above $104,000 or a breakdown below $100,000, with volume confirmation being key to validating either.
📊 $ Bitcoin Analysis: The chart shows a recent pullback after a strong uptrend, indicating potential profit taking. The price is testing the 100,000 support level, which is in line with the 100 EMA, and is an important level to watch.
If it holds, it could bounce towards the 104,000 resistance level. Make sure… pic.twitter.com/smlLaqsr2Tz
– Satoshi Wolf (@SatoshiWolf) December 18, 2024
Featured image created with DALL-E, chart from TradingView
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