Analysts suggest that a breakout above Bitcoin’s descending trendline could reignite bullish sentiment, while a breakdown below key support levels may add to the bearish pressure.
The Crypto Fear & Greed Index, a widely regarded barometer of market sentiment in the cryptocurrency space, has retreated to levels last seen in October. As of December 30, the index stands at 65, marking a decline from its November and early December highs. Despite remaining within the “greed” zone, this is a major drop from the peak score of 94 recorded on November 22. This shift in sentiment coincides with Bitcoin’s recent price downturn.
After reaching an all-time high of $108,268 on December 17, Bitcoin BTC $83 828 24h volatility: 2.4% Market cap: $1.66 T Vol. 24h: $26.18 B has shed 13.5% of its value, currently trading around $93,460. The cryptocurrency’s market capitalization has also dropped by 16%, now sitting at $1.84 trillion.
Market dynamics have evolved notably since November, when Donald Trump won the presidential election in the United States. While these political developments initially fueled optimism, the recent decline underscores market indecision.
Veteran trader Peter Brandt has suggested that Bitcoin’s price movement may be following what he terms a “Hump Slump Bump Dump Pump” pattern. According to Brandt, this sequence involves an initial rise, a correction, a partial recovery, a sharper decline, and finally, a rebound. Bitcoin’s current consolidation phase between a descending trendline and key support levels reflects this potential trajectory.
Meanwhile, CoinMarketCap data shows that the total market capitalization of all cryptocurrencies has fallen from $3.8 trillion on December 17 to $3.27 trillion as of December 29 – a drop of over 13%.
What Do Technical Indicators Suggest?
Analysts suggest that a breakout above Bitcoin’s descending trendline could reignite bullish sentiment, while a breakdown below key support levels may add to the bearish pressure.
On December 29, renowned Bitcoin analyst Rekt Capital noted that the breakdown of previous support levels has turned these zones into new resistance levels, signaling a potential confirmation of bearish momentum. However, the extent of downside continuation has been limited so far. According to Rekt Capital’s analysis, Bitcoin would move decisively lower only if it breaches the $94,250 level on the daily chart. A loss of this level could pave the way for Bitcoin to test the low $90,000 range.
What’s Next?
On the other hand, some experts remain optimistic about Bitcoin’s trajectory in 2025. A December 28 report from Blockware Solutions outlines two potential scenarios for the next year: a “bear case”, where Bitcoin climbs to $150,000, and a “bull case”, projecting a surge to $400,000, depending on the adoption of a Bitcoin reserve policy under Trump.
As the year concludes, traders and investors remain cautious. While optimism surrounding pro-crypto political leadership persists, market participants are bracing for potential turbulence in the early days of 2025.
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