Bitcoin traders rapidly adjust their short-term BTC price outlook as support fails and BTC/USD heads
Bitcoin traders rapidly adjust their short-term BTC price outlook as support fails and BTC
$BGB
Bitcoin starts Christmas week at a bearish crossroads as BTC price support thins and forecasters see a chance of a major dip.
A “bearish engulfing” on weekly timeframes makes traders nervous over the short-term outlook for BTC/USD.
Targets for a possible deeper correction include a return to near old all-time highs of $74,000.
US jobs data lead a quiet macro week, but markets are still reeling from last week’s hawkish Fed meeting.
Those looking to gain long-term BTC exposure get their first buy-in opportunity in two months, per data from a dedicated indicator.
Crypto market sentiment is rapidly souring, but “greed” still reigns.
Bitcoin suffers “bear engulfing” on weekly close
After a limp weekly close, Bitcoin is struggling to preserve support in the mid-$90,000 zone as the holiday period looms.

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView
Data from Cointelegraph Markets Pro and TradingView paints an uncertain picture for BTC price action, with BTC/USD still down $13,000 from last week’s all-time highs.
“Bitcoin has confirmed a Bearish Engulfing candlestick formation,” popular trader and analyst Rekt Capital wrote in one of his latest posts on X, this time for the weekly chart.
BTC/USD 1-week chart. Source: Rekt Capital/X
Rekt Capital warned that BTC/USD had “lost” weekly support, signaling the end of a five-week uptrend.
“Bitcoin is showing increasing signs of transitioning into a multi-week correction,” another post warned.
“Any relief rally, if at all needed, into these old supports could turn them into new resistance to confirm additional downside continuation.”
BTC/USD 1-week chart. Source: Rekt Capital/X
Others entertained the idea of a drop to old all-time highs from March at a now-distant $74,000.
“In past cycles it's been the norm for -30% pullbacks during the bull market,” trader Josh Rager noted in part of an X post on Dec. 23.
“This current price action hasn't been fantastic but it also hasnt been awful. Imagine pulling back to $75k right now for a -30% pullback.”
BTC/USD chart fractal. Source: Jelle/X
Fellow trader Jelle eyed comparisons to last year’s BTC price action to predict a return to upside after “a few more weeks of struggle.”
For some short-term hope, meanwhile, Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriole Investments, revealed that Dec. 26 is traditionally a high-performing calendar day for the S&P 500.
“The 26th is the highest returning day of the year historically,” he told X followers alongside data from Carson.
“X-mas relief bounce coming?”
$80,000 looms as short-term BTC price target
Holiday periods bring new challenges for crypto market participants thanks to extended periods of “out-of-hours” trading.
The absence of the liquidity profile normally available on workdays can exacerbate moves up or down.
Taking a broad view of the liquidity landscape on exchanges, popular trader and commentator Mark Cullen now sees two key levels to watch into 2025. One will be painful for bulls.
“Liquidity is stacked up like presents under the Christmas tree at 115k and at sub 80k,” he summarized on X alongside data from monitoring resource CoinGlass.
“The big question: Which level gets hit first? And will we see a festive swing where both levels get a run?”
BTC/USD chart with order book liquidity data. Source: Mark Cullen/X
The accompanying chart shows two areas where liquidations would likely occur en masse should spot price reach them.
A drop to $80,000, meanwhile, would constitute a regular bull market correction compared to previous BTC price cycles.
As Cointelegraph reported, dips of 20% or more have characterized Bitcoin’s march to previous all-time highs, with onchain analytics firm Glassnode revealing that this cycle has been broadly less volatile than in the past.
“The deepest drawdown this cycle was -32% (Aug 5, 2024), with most corrections only -25% below local highs, reflecting spot ETF demand & rising institutional interest,” Glassnode noted in part of an X post this weekend.
Bitcoin bull market drawdowns. Source: Glassnode/X
BTC price could drop $20,000 in macro liquidity crunch
With a quiet week ahead for macroeconomic data prints, traders face less risk of snap risk-asset volatility at the hands of inflation surprises.
That said, Dec. 26 will still see US initial jobless claims released — an event that crypto markets have proven especially sensitive to this year.
The macro climate, more broadly, is once again uncertain. Last week, the Federal Reserve lowered interest rates by a predicted 0.25% while conjuring a hawkish stance on 2025.
The result was a risk-asset knockdown which included Bitcoin and altcoins, with markets seeing less chance of further rate cuts going forward in a potential blow to liquidity.
Commenting on the topic, trading resource The Kobeissi Letter saw another liquidity headwind for Bitcoin in particular.
“In the past, Bitcoin prices have followed global money supply with ~10 week lag,” it wrote on X at the weekend.
“As global money supply hit a new record of $108.5 trillion in October, Bitcoin prices reached an all-time high of $108,000. Over the last 2 months, however, money supply has dropped by $4.1 trillion, to $104.4 trillion, the lowest since August.”

BTC/USD vs. global M2 money supply. Source: The Kobeissi Letter/X
Kobeissi warned that BTC/USD may “take a pause” in its bull market and even see a heavier correction next.
“If the relationship still holds, this suggests that Bitcoin prices could fall as much as $20,000 over the next few weeks,” it continued.
On the topic of risk assets in general, Kobeissi added that it expected volatility to “carry over” into the coming week.
As Cointelegraph reported, others also see January potentially sparking a major BTC price retracement.
Bitcoin DCA signal flashes after two-months
After a two-month absence, BTC price action has returned to levels that a dedicated buying indicator says will be profitable.
The so-called Smart DCA tool from onchain analytics platform CryptoQuant highlights when BTC/USD is trading below its short-term realized price.
Realized price refers to the aggregate price at which the supply last moved. Smart DCA uses transactions occurring between a week and a month prior to the date of observation to determine comparatively lower price levels and, thus, potentially lucrative buying opportunities.
DCA refers to dollar-cost averaging — the practice of buying BTC with a set amount of capital at regular intervals.
At $95,000, BTC/USD is now in a “favorable zone for implementing a DCA strategy,” CryptoQuant contributor Darkfost wrote in one of its Quicktake blog posts this weekend.
“Employing a DCA strategy helps mitigate the impact of volatility and reduce associated risks, making it a prudent approach depending on market conditions,” he explained.
“This tool, when used alongside an understanding of broader market trends and sentiment, can deliver valuable insights for making informed investment decisions.”
Bitcoin Smart DCA chart (screenshot). Source: CryptoQuant
Earlier, Cointelegraph reported on another indicator that conversely tells hodlers to sell BTC when supply profitability reaches a certain level.
“Severe FUD” impacts sentiment
Bitcoin sentiment arguably took an even greater beating than the price during last week’s liquidity flush — but research argues that that could ultimately benefit bulls.
In an X post on Dec. 22, research firm Santiment revealed what it described as the “highest FUD spiral of the year” among social media users.
Analyzing commentary across X, Reddit, Telegram and 4Chan, Santiment calculated that for every four positive market comments, there were five negative ones.
“Crypto's further flush has sent Bitcoin's crowd sentiment down to its most negative statistical point of the year,” it wrote in accompanying commentary.
“Vocal traders are now showing severe FUD, and that's good news for contrarians who know markets move the opposite direction of retail's expectations.”
Bitcoin social media sentiment data. Source: Santiment/X
A chart highlighted similar situations in 2024, all coinciding with market rebounds.
Meanwhile, the Crypto Fear & Greed Index, which takes data from a range of sources to calculate the mood among traders, remains in “greed” territory.
The Index peaked at 94/100 on Nov. 22, marking a level historically known for downward market reversals. On that day, BTC/USD closed at around $99,000.
The last time that “greed” was so prevalent among traders was in February 2021.
$BTC
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