Bitcoin Prices Near $95,000 Following Significant Drop Amid Low Volume
Bitcoin prices fell close to $95,000 after a nearly 5% decrease within a day, influenced by low trading volume, a TradingView glitch, and variable market expectations regarding cryptocurrency policies.
On the evening of December 26, Bitcoin prices hovered close to $95,000, reflecting nearly a 5% decrease in value within a 24-hour period. This decline followed a peak of approximately $99,900 on Christmas Day, with the cryptocurrency touching as low as $95,083.93, as per data from Coinbase via TradingView. Despite some recovery, Bitcoin continued trading within the $95,000 to $96,000 range at the time of reporting.
Analysts attribute the recent drop to several factors, notably low trading volume, which often leads to increased volatility. Tim Enneking, managing partner at Psalion, noted that the holiday season contributes to a prolonged period of diminished trading activity, making markets more susceptible to larger price swings. Additionally, Alex Lin, cofounder of Reforge, categorized low trading volume as a typical phenomenon during this time of year.
Compounding this market environment was a glitch experienced by TradingView, which erroneously reported Bitcoin’s market dominance at 0%, causing panic among traders and resulting in significant sell-offs. Marc P. Bernegger, cofounder of AltAlpha Digital, confirmed that the glitch contributed to market volatility, leading to liquidations of around $33 million in long Bitcoin positions.
Moreover, George Kailas, CEO of Prospero.ai, proposed that the price fluctuations may also be indicative of a natural market correction after an upward trend. He highlighted that market sentiments are influenced by expectations of more favorable cryptocurrency policies from U.S. leadership, although such policies have yet to materialize. These expectations introduce a degree of uncertainty, affecting investor confidence and pricing strategies.
Bitcoin has been subject to dramatic price fluctuations, especially around the holiday season, where trading volume tends to decrease significantly. This decreased activity can amplify price movements due to lower liquidity in the market. Moreover, technological anomalies, such as glitches in trading platforms, can further exacerbate volatility and contribute to misleading market dynamics. Overall, external factors such as regulatory expectations and market sentiment play an essential role in shaping Bitcoin’s price actions during such periods.
In summary, Bitcoin’s recent decline to near $95,000 is attributed to a combination of low trading volume, technical glitches on TradingView, and the expectations surrounding potential cryptocurrency-friendly policies. As the market navigates these unstable conditions, investors remain vigilant, recognizing the inherent volatility associated with trading during the holiday season.
Original Source: www.forbes.com
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