Bitcoin price has entered a technical correction and found support at the 50-day moving average.
Bitcoin (BTC) fell to $94,830, down over 12% from its peak this month, as the Santa Claus rally failed to materialize.
The decline came in a low volume environment as many investors and traders remained in Christmas mode.
According to CoinGecko, Bitcoin volume was $22 billion on Sunday, December 29, down from $41 billion the previous day. Its volume was $45 billion on Friday, higher than $33 billion on Thursday. Under normal market conditions, Bitcoin tends to have a daily volume of over $100 billion.
Bitcoin lost momentum after the Federal Reserve held an extremely hawkish monetary policy meeting earlier this month. She cut interest rates by 0.25%, while her dot chart only indicated two cuts. The Fed had indicated it would make up to four interest rate cuts in 2025.
Bitcoin is also struggling with doubts about a strategic Bitcoin reserve fell and ETF inflows fell. The polymarket probability of Donald Trump creating these reserves in the first 100 days has fallen to 29%, compared to the November peak of 60%.
Meanwhile, ETF inflows have been sluggish in recent days. Data from SoSoValue shows that Bitcoin ETFs have lost assets in 6 of the last seven market days. These funds have accumulated $35.6 billion in net assets since their inception.
Will BTC Have a January Effect?
The so-called Santa Claus rally, in which assets recovered before December 25, failed to materialize. Therefore, Bitcoin investors are hoping that it will achieve a so-called January effect – a theory that suggests…
