How deep will crypto dive?

Market picture

The crypto market continues to retreat, having lost 4.4% to $3.36 trillion in the last 24 hours and already over 11% from the all-time peak of $3.79 trillion set on Tuesday. While the sell-off in stock markets has slowed, cryptocurrencies are maintaining or even picking up the pace of the decline. This return to early December levels is reminiscent of the rally locking in from November or all the growth of 2024. In the former case, the sell-off could pause in the $3.2 trillion area (-5% from current levels), while in the latter case, the sell-off could pause in the territory below $3 trillion with potential above 12.5%. Despite the threat of a deeper correction, we remain positive on the outlook for the year ahead.

Bitcoin is back below $100K, getting support at $96K on Friday morning. A failure below $94.5K would signal a break of the uptrend of the last six weeks, while a fall below $92K on Friday or below $93K by the end of the week would bring the price under the 50-day moving average. In this case, time is playing on the side of the bears.

News background

The sharp rise in the ‘network profit’ of new bitcoin investors, coupled with the active distribution of coins by hodlers, suggests a transition into the late stage of the bull market. This is the conclusion reached by Glassnode.

Mining company MARA Holdings purchased 15,574 BTC at an average price of ~$98,529 per coin. The company has grown its bitcoin reserves to 44,394 BTC. Hut 8, another miner, acquired 990 BTC at an average price of $101,710 per coin to total reserves of 10,096 BTC.

The IMF and El Salvador reached an agreement in which the country pledged to mitigate the risks associated with bitcoin in exchange for a $1.4 billion funding package. The IMF has repeatedly criticised El Salvador for its adoption of bitcoin, suggesting that its status as legal tender should be revoked and its reserves should be liquidated.

Total commissions received by Solana applications through November topped $365 million, including $106 million from ‘meme-token factory’ Pump.fun.