Hypothesis of correction on the price of Bitcoin

Since yesterday, the hypothesis has been circulating insistently that there could be a new correction in the price of Bitcoin. 

On the other hand, there has already been one, and there do not seem to be any signs of a possible restart of the bullrun in the short term. 

The previous corrections on the price of Bitcoin

With Donald Trump’s victory in the presidential elections on November 5th, a new bull run of Bitcoin has begun. 

With this bull run, essentially for a month, the price of Bitcoin has risen. 

However, it was not a continuous rise, so much so that there have already been two corrections. 

The first occurred between November 23 and 26, after the price of BTC rose above $99,000 for the first time. That correction caused the price to drop by 9% from the highs, in about four days, and was followed by an almost immediate rebound.

In fact, already on November 29, the price of Bitcoin had returned to just below $99,000.

The second correction, however, occurred last Thursday, just right after the price of BTC surpassed $100,000. In that case, the price fell by 11% in a single day, but immediately bounced back the same day above $97,000. In fact, the extremely short duration of this last correction makes it practically insignificant. 

The possible new correction of the Bitcoin price

Today the price of Bitcoin for a brief moment returned above $100,000, a figure surpassed also on Friday, Saturday, and Sunday. 

Subsequently, it returned below $99,000. 

These movements are really insignificant, so much so that it can be stated that, in fact, from last Thursday to today the price of BTC is moving sideways around $100,000, after rising above this figure for the first time. 

The point, however, is that there do not seem to be any signs of a possible restart of the bull run in the short term. 

The hypothesis circulating is that it might take a couple more weeks for the bull run to recover, and therefore there would also be plenty of time for a new correction. 

The key to understanding what is happening during this period seems to be profit-taking, given that everyone who bought Bitcoin before the victory of Trump, and who have not yet sold, can now sell at a profit.

Those who think of waiting for the bull run to restart will probably not sell, but those who think that waiting a few weeks is too much will most likely sell, also because there is no guarantee that the bull run will restart. 

If the previous correction, the significant one at the end of November, was characterized by a -9% from the highs in four days, a similar correction could bring the price around $92,000, even if the figure circulating is $94,000.

The restart of the bull run

In particular, volatility is expected after the 20th of the month. 

In the event that a correction occurs before that date, it is possible to imagine that the volatility at that point could be bullish. 

On the other hand, there is a dynamic that occurs every year in which there is a bullrun, which could easily repeat itself. 

The fact is that selling in December means paying taxes on capital gains next year, while postponing the sale by just a few days, and early January, delays the payment of those taxes by a whole year. 

Therefore, the closer January gets, the more it might be advantageous to wait to sell at a profit to easily push the tax payment forward by a year. 

Therefore, in the second half of December, the selling pressure, already low, could decrease further, so much so that if the demand remains strong, the price should end up rising. 

Obviously, however, in January, this dynamic should reverse, even if it rarely extends into February. 

The 100k are not holding

The reason for such pessimism, in the short term, is precisely due to the fact that the psychological threshold of $100,000 is not holding. 

At a certain point, many might really decide to take profit if they become convinced that the bullrun will not restart, or at least not restart soon. 

It should not be forgotten that speculators have short or very short-term time horizons, while only holders have medium/long-term time horizons. 

There are, however, several clues that suggest the bullrun might extend into 2025, so while on one hand speculators might decide to take profit, holders in this phase might decide to continue holding perhaps for months. 

The thing that makes all this plausible is the fact that the number of BTC on exchanges is at its lowest in years, and this confirms that the holders are continuing to hold, while many speculators may have already taken profit. 

It is also worth noting that today the CoinMarketCap altseason index has fallen below 75 points, marking the end of the mini-altseason of recent weeks. In other words, the bullish period that began with Trump’s victory has ended, and it might take a few more days before another one can start.