Bitcoin's $85K Price Challenge: Familiar Holiday Trends

The holiday season is here, and while Christmas has set off the festivities, many investors continue to hesitate about "buying the dip." Traditionally, the timeframe from late December to early January has been a bullish period in the cryptocurrency market. For instance, the last cycle experienced a surge in total market capitalization by nearly $200 billion.

Key Takeaways

The holiday season typically presents bullish opportunities for Bitcoin, though this year began with a slight market dip.
Recent volatility has raised questions about market manipulation, particularly around significant price drops and rebounds.
Bitcoin is currently battling around the $85k mark, with market sentiment showing fear, which may indicate a strong accumulation phase.
The technical setup for BTC appears positive, with a recent 2.20% increase pushing it closer to the key $90k level.
Overall investor strength suggests that the holiday rally for Bitcoin could still unfold as the season progresses.

Bitcoin

However, this time around, the cycle began with a slight 0.82% decrease, trimming about $30 billion off the market. Despite this dip, given the recent fluctuations in prices, it appears that another Bitcoin (BTC) holiday rally could still be on the horizon.

BTC

Source: TradingView (BTC/USD1)

This recent volatility has sparked a discussion about market manipulation. On December 24th, the BTC/USD pair on Binance experienced a dramatic plunge from an opening price of $87k to a low of $24k, representing a steep 73% drop. The timing of this significant movement only added to the speculation around manipulation.

With lower trading volume typical of the holiday season and subdued retail involvement, much of the focus shifted to influential buyers, or "smart money," pushing prices during a narrow timeframe. The pressing question now is whether this drastic move has disrupted the holiday rally or if it has merely reset Bitcoin for a new upward trajectory.

Bitcoin's Ongoing Struggle with Volatility

This holiday season, Bitcoin finds itself in a fierce battle around the $85k mark. Market sentiment currently leans towards "fear," which has historically indicated a strong accumulation phase. This suggests that, despite the manipulation efforts by Binance, the fear, uncertainty, and doubt (FUD) in the market is still prevalent, leading to a positive divergence.

Bitcoin is showing promising technical indicators as well, having gained 2.20% intraday, and is nearing the crucial $90k fear of missing out (FOMO) threshold. As a result, the short positions in the market are increasingly at risk of being wiped out.

Bitcoin

Source: TradingView (BTC/USDT)

In essence, Bitcoin's ability to withstand market FUD is strengthening its support. In this environment, the recent whale activity on Binance, highlighted by the sudden 73% drop and rapid recovery back to $85k, reflects typical liquidation strategies. This move seems to have shaken out weaker investors while testing the conviction of others in the market.

With that volatility behind, Bitcoin’s 2.2% recent surge appears robust, indicating that stronger investors are maintaining control. The holiday rally for Bitcoin remains a possibility, with the $85k level serving as a launchpad for potential gains.