Bitcoin's price fell below $86,000 for the first time in two weeks, and investor sentiment subsequently declined. The largest cryptocurrency is further venturing into bear market territory.
Analysts say Bitcoin prices are approaching the lower end of their recent trading range, and they expect another wave of selling should prices rebound, as investors who bought at the all-time high in early October may be able to recoup some of their losses.
Lack of investment interest in the market
On Monday (December 15), Bitcoin fell 3.7%, dropping to $85,171. On Tuesday (December 16), the price recovered somewhat in Asian trading, but soon fell back to $85,575 at the time of writing. Compared to its all-time high of over $126,000, the price has fallen by approximately 30%.
Furthermore, the price of Bitcoin is gradually approaching the year's low of $74,400 reached in April.
Bohan Jiang, a senior derivatives trader at FalconX, pointed out, "Bitcoin's price has been fluctuating between $85,000 and $94,000 recently, and the entire cryptocurrency market currently lacks investment interest and trading volume is low."
In recent weeks, Bitcoin has continued to decline like other risk assets, but when other assets rebounded, Bitcoin failed to follow suit, breaking its usual correlation with market trends.
This decline also shows that even after the Federal Reserve cut interest rates last week, the crypto market is still squeezed due to insufficient liquidity and weakened risk appetite.
Chris Newhouse, head of research at decentralized finance firm Ergonia, said the decline in Bitcoin was primarily driven by spot and derivatives holding strategies, rather than forced liquidation.
Newhouse stated that the relatively stable liquidation data suggests that over-leveraged positions have been cleared, leaving behind a more natural but potentially more sustained selling pressure.
Strategy maintains its strategy of increasing holdings.
However, the recent volatility in the crypto market does not seem to have stopped Michael Saylor's Strategy firm from continuing to increase its Bitcoin holdings.
This original digital currency The custodian firm also stated earlier this Monday (December 15th) that it had purchased nearly $1 billion worth of Bitcoin for the second consecutive week. Most of Strategy's recent acquisitions were funded through market offerings of its Class A common stock.
However, critics have expressed concern that selling these shares would dilute existing shareholder equity and undermine the company's existing high stock premium.
(Article source: CLS)
