Bitcoin (BTC) has shown resilience in recent days, bouncing back from weekly lows and inching closer to the $97,000 mark. As of December 4, BTC/USD was up by 1% on the day, signaling a cautious shift in market sentiment after a period of volatility. The recent price action was influenced by a combination of technical levels and external factors, notably political turmoil in South Korea, which briefly sent Bitcoin below $94,000.
Flash Volatility Triggered by Global Events
The sudden volatility in Bitcoin’s price on December 4 came amid a flash crash, partly caused by the “Kimchi premium.” This phenomenon is the price disparity between South Korean exchanges and global counterparts. The premium fell to historic lows, resulting in a rapid decline in BTC/KRW trading on exchanges like BitHumb, where the price briefly plummeted to $78,000 before resetting. This sharp price move exemplifies the influence of local market conditions on the global Bitcoin price.
Key Technical Levels to Watch
Bitcoin’s price recovery is being closely monitored by traders who are focusing on key technical levels. Currently, the 21-day simple moving average (SMA) stands at $94,560, with traders eyeing this as a crucial support level. According to popular trader Skew, Bitcoin must reclaim the weekly open at $97,270 to sustain a bullish outlook. “Ideally, want to see price above $95K after that sweep,” Skew said, referring to a previous price dip.
$BTC 4H
— Skew Δ (@52kskew) December 3, 2024
Lows got raided into new york open before reversal
ideally want to see price above $95K after that sweep
coming daily open will be important I think for setting up a potential trade towards weekly open
weekly open reclaim is very key for higher https://t.co/8yo5nolWKz pic.twitter.com/R1a9l89CX3
On the daily chart, Bitcoin continues to retest previous lower highs as support, according to analyst Rekt Capital. The asset has been generating longer downside wicks, suggesting that it is grabbing liquidity at lower levels without losing its upward trendline. This pattern indicates that Bitcoin may be poised for another upward move if the current support levels hold.
Potential Downside Risk
However, not all analysts share the same optimistic view. CrypNuevo, another prominent trader, warned that a downside wick on the weekly timeframe could trigger a more substantial retest of lower price levels, with a potential target around $90,000 or even lower. The recent market behavior suggests that Bitcoin is testing its support zones, and further weakness could lead to a deeper correction.
Retail Interest Surges Amid Profit-Taking by Long-Term Holders
While some investors are taking profits amid Bitcoin’s recent surge, retail interest in Bitcoin is on the rise. Data from on-chain analytics platform CryptoQuant shows that the 30-day change in buyer volume among smaller investors has surpassed 30%. This increase in retail activity could help sustain Bitcoin’s price, even as long-term holders begin to cash out. Analyst Darkfost pointed out that the surge in retail demand may explain the ongoing upward pressure, with $100,000 still in play as a critical psychological level for market sentiment.
Bitcoin’s price action on December 4 signals a cautiously bullish outlook as it rebounds from recent lows. Traders are focused on key levels, particularly the weekly open at $97,270, and the 21-day SMA at $94,560. While there are concerns about a potential downside retest, the surge in retail interest and the strength of the underlying trend could propel Bitcoin higher. As the market continues to digest these price fluctuations, all eyes will be on whether Bitcoin can reclaim key levels and maintain its upward momentum.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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