Bitcoin Price Sees Downward Trend Despite Fresh Acquisitions by MicroStrategy and Tether
Despite recent acquisitions by MicroStrategy and Tether, the Bitcoin price has continued its strong downward trend, trading near the $91,000 level on Monday, Dec. 30. This decline represents a 15% drop from its highest level this year, with technical indicators suggesting further downside.
MicroStrategy and Tether Increase Their Bitcoin Holdings
MicroStrategy announced the acquisition of 2,138 additional Bitcoins, marking its eighth consecutive week of purchases. This brings the companyβs total holdings to 446,400 Bitcoins. Tether also increased its holdings by 7,630 Bitcoins, taking its total to over $7.7 billion. Other large companies, such as Marathon Digital, Riot Platforms, and Hut 8 Mining, have also continued to expand their Bitcoin reserves.
Bitcoin Price Retreat Attributed to Profit-Taking and Risk-Off Sentiment
Bitcoinβs decline can be attributed to profit-taking by investors who have benefited from its more than twofold increase this year. The decline is also tied to a risk-off sentiment in the market, as evidenced by the US dollar index rising to $108.14 and significant declines in the Dow Jones and Nasdaq 100, which fell by 670 and 320 points, respectively.
Concerns About Bond Vigilantes and Rising Bond Yields
Another contributing factor to the decline is concerns about bond vigilantes in anticipation of Donald Trumpβs presidency. Bond vigilantes typically push bond yields higher when budget deficits rise. The 30-year yield has reached 4.76%, and the 5-year yield has reached 4.3%, near their highest levels this year.
Potential Downside Risks for Bitcoin and the Stock Market
These dynamics have raised concerns that soaring bond yields could lead to downside risks in the crypto and stock market in 2025.
Bitcoin Price Could Crash to $73,780
According to the daily chart, BTC has retreated sharply in recent days. It has flipped the 50-day Exponential Moving Average into a resistance level and is now attempting to fall below the key support at $91,430. Additionally, Bitcoin appears to have formed a head and shoulders pattern, a widely recognized bearish reversal indicator. It has also dropped below the weak, stop & reverse point of the Murrey Math Lines at $93,750.
As a result, Bitcoin may drop to the next major support level at $73,780, the peak from March 14. If this happens, Bitcoin could see a further decline of approximately 20% from its current price.
Investors should be cautious and monitor the market closely, as the current trend suggests further downside risks.
Tips for Investors:
- Monitor the market closely for any changes in the trend.
- Set stop-loss orders to limit potential losses.
- Diversify your portfolio to minimize risks.
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