Bitcoin Price: Will the Sell-Off Pressure Continue in 2024?
Bitcoin Price– As we head into the end of 2024, Bitcoin’s price volatility continues to dominate market discussions. After a dramatic 10% drop last week, analysts are starting to predict that any future price corrections may be less abrupt, as selling pressure seems to have eased significantly. However, not everyone is convinced that the market has reached stabilization just yet.
Recent Bitcoin Price Drop: What Caused the 10% Plunge?
Bitcoin’s price saw a sharp decline on December 6, dropping nearly 10% within a 24-hour period—from a high of $103,493 to below $93,000. This was just a day after Bitcoin surpassed the $100,000 mark for the first time on December 5. According to CoinMarketCap data, the drop triggered over $303.5 million in long position liquidations, with total liquidations over the 24 hours hitting $404 million.
Despite the dramatic drop, some analysts believe that Bitcoin’s price is now experiencing some stabilization.
Signs of Easing Sell-Side Pressure
Bitfinex analysts have pointed out that signs of “easing sell-side pressure” are emerging, indicating that Bitcoin’s price might not face such severe declines in the near future.
According to Bitfinex’s December 9 market report, realized profit (RP)—a metric that tracks USD gains from moved coins—peaked at $10.5 billion per day during Bitcoin’s surge toward $100,000. However, it has since fallen to approximately $2.5 billion per day, representing a 76% decline. This sharp drop suggests that profit-taking activity has significantly cooled, which may mean that any future sell-offs could be less dramatic.
Bitfinex analysts noted:
With such a decline in realized profit and sell-side pressure, we can expect future declines to be less abrupt than the one experienced last week.
At the time of writing, Bitcoin was trading at $97,483, according to CoinMarketCap data.
Market Stabilization and Funding Rate Insights
Bitfinex analysts also noted that Bitcoin’s funding rates are “stabilizing,” which indicates that the market is transitioning to a “more balanced phase.” In this phase, volatility may be contained, and price movements are expected to be less erratic in the medium term. The current funding rate for Bitcoin on Binance, the world’s largest crypto exchange, stands at 0.01%, according to CoinGlass data.
While these developments suggest a move towards stability, some market observers remain cautious about the outlook for Bitcoin in the short term.
Skepticism About Market Stabilization
Despite signs of market stabilization, Glassnode’s lead analyst James Check expressed doubts about the current market conditions. In a post on December 9, Check warned that “sell-side pressure by existing holders is tremendous right now,” which he believes is overwhelming demand from both institutional buyers and exchange-traded funds (ETFs).
Check commented:
Sell-side pressure by existing holders is tremendous right now, and in my view, completely overwhelms the demand from both ETFs and MSTR.
He added that “there are lots of heated signals” in the market, hinting at potential volatility in the near future.
Long-Term Holders in Significant Profit
One of the key factors contributing to the current market uncertainty is the behavior of long-term Bitcoin holders. The Long-Term Holder realized price—essentially the average price paid by long-term holders—is around $24,481, representing a roughly 400% average gain for these holders. As Bitcoin’s price climbed towards the $100,000 mark, many long-term holders took the opportunity to sell, potentially signaling a market top.
Some analysts believe this could lead to a reduction in buy-side demand, as long-term holders are less likely to continue selling at such high levels. CryptoQuant contributor Maartuun described this situation as “a game of musical chairs,” advising:
Enjoy the ride, but be prepared when the music stops.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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