Despite a noticeable cooldown in trading volumes, Bitcoin’s underlying market structure has continued to strengthen. The price action has stabilized within a narrow range as long-term holders maintain firm conviction. As more BTC flows into cold storage and supply on exchanges tightens, the market is transitioning from hype-driven swings to steady structural support.

How The Price Compression Builds Energy For A Larger Move

CIO and founder of MNFund and MNCapital, CryptoMichNL, emphasized that Bitcoin shares a strong correlation with the Nasdaq. While Nasdaq continues to show steady resilience, BTC has stalled behind. This mismatch creates a mispricing and market divergence, which is why the path toward $100,000 remains wide open and why the 4-year cycle thesis doesn’t hold up.

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Recently, BTC saw a massive correction, dropping from $115,000 to $80,000 in just two weeks. During that same liquidation period, what LVisserLabs calls the rotation between Pure Vol vs. Pure Profitability or Beta vs. Quality has fallen sharply. Beta here refers to high-volatility, high-beta stocks, which are essentially tech stocks that drive the markets. Meanwhile, Quality means more risk-off assets, including high-quality, profitable, and stable companies. 

Currently, BTC has stalled after the sell-off, and the Beta assets have recovered substantially, implying that the stocks have inverted their loss with the big drop and are now grinding upwards, signaling that risk-on appetite is clearly back. With this kind of structural divergence, it’s likely that in the coming weeks or months, BTC will grind upward to $110,000 and $115,000 levels, reversing the drop as the entire correction was a little dubious.

CryptoMichNL advised that instead of relying on a time-based sounding the 4-year cycle assumption, it is better to focus on the charts and macro relationships that directly influence BTC price.

On-Chain Activity Shows Clear Confidence From Big Money

The ambassador of StandXOfficial and the KOL of Binance, who is also an advisor at KOLsAgency, Investor Ucan, has highlighted that the evidence of Bitcoin’s latest upward move is already on-chain. The last six hours have revealed a clear surge of institutional demand. On-chain data shows that Binance purchased 7,298 BTC, Coinbase bought 1,362 BTC, Wintermute bought 2,174 BTC, BlacRock bought 1,362 BTC, and an unknown whale bought 6,192 BTC. In total, 20,438 BTC were purchased in just six hours, valued at approximately $1.9 billion.

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Ucan noted that the timing of this purchase is what stands out. These inflows hit the market hours before the Federal Reserve’s upcoming employment data was released. Institutional is clearly expecting a supportive outcome. A positive print refers to easing expectations and fresh liquidity on the horizon. Retail traders are reacting, and the institutions are anticipating early. If the Fed confirms what these flows imply, today’s buying won’t look like simple momentum, but preparation.

Featured image from Pixabay, chart from Tradingview.com

Bitcoin (BTC) lost the $100,000 threshold after registering a 6.4% drawdown in the past 24 hours, priced at $97,000 as of press time.

Bitcoin fell to a low of $96,233 before attempting a recovery. As a result, crypto derivatives registered nearly $1.2 billion in liquidations over the period, based on CoinGlass data.

Sharper corrections among major altcoins followed BTC’s slump, as the total crypto market cap fell 9% in the same period to $3.63 trillion.

Ethereum (ETH) was trading at $3,372 after shedding 10% over the past 24 hours, while Solana (SOL) registered an identical crash to a low of $187.

Chainlink (LINK) and Dogecoin (DOGE) had the worst performances among the 20 largest cryptos by market cap, with 17.3% and 18% corrections, respectively.

The crashes are likely an aftermath of Fed Chairman Jerome Powell’s statement about the US interest rate policy.

On Dec. 18, Powell signaled that the policy rate could be more cautious following the recent cuts, which analysts see as two rate cuts next year. Additionally, the Fed Chair noted that potential cuts will depend on market data and will take time for inflation to reach 2%.

Despite the market’s uncertainty toward the US economy, Powell displayed optimism in his speech yesterday:

“It’s in a really good place, our policy is in a really good place (and) I expect another good year next year.”

Potential shutdown

In addition to the uneasiness created by Powell’s recent remarks, the US Congress faces a looming partial government shutdown, with only two days remaining to pass a spending bill.

President-elect Donald Trump has rejected a bipartisan stopgap measure intended to extend government funding through Mar. 14, 2025, insisting that lawmakers first address the national debt ceiling.

In response, congressional Republicans are developing an alternative plan that aligns with Trump’s demands to secure sufficient House and Senate support. 

Without legislative action, a government shutdown, set to begin on Dec. 21, would disrupt numerous services and delay federal employee paychecks. 

Trump has also proposed abolishing the debt limit entirely, a suggestion likely to be criticized due to concerns of fiscal irresponsibility.

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