The price of Bitcoin has remained below its two-year bullish market channel for six weeks, exhibiting a 2021-like rounded top, with VanEck’s hashrate drop data highlighting a crucial retest of resistance.
Summary
- BTC has fallen below a long-established ascending channel, experiencing three unsuccessful attempts to reclaim it, with the channel’s lower boundary becoming significant resistance.
- The current price movements mirror those of 2021, showing a breakdown, a sharp decline, a corrective bounce, and renewed selling targeting the same support zone now under scrutiny.
- VanEck highlighted a 4% drop in hashrate, historically indicative of market bottoms; however, analysts caution that confirmation is dependent on BTC’s response to the current resistance level.
The Bitcoin price is presently trading beneath its long-term bullish market channel for six consecutive weeks, prompting concerns regarding the cryptocurrency’s immediate future as 2025 approaches, according to market analysts.
Bitcoin price stalls at key level, what’s next?
Bitcoin is presently consolidating just beneath this resistance zone, indicating the potential for a fourth attempt to break through. Market analysts suggest that the asset’s reaction at this juncture could dictate whether the recent downturn represents a short-term fluctuation, a retest from below, or the onset of a prolonged downward trend.
Several analysts have noted parallels between Bitcoin’s current price movements and the patterns seen in 2021. In both scenarios, the asset displayed a rounded top formation, followed by a sharp decline, a bounce back, and continued downward pressure, according to technical analysis reports.
One analyst pointed out that the support level currently under examination was also prominent in the 2021 cycle when a breakdown from that level prompted a notable price drop. The analyst remarked that while a movement toward previous peak levels remains conceivable, such levels have historically indicated turning points in market sentiment rather than sustained strength.
Technical analysts offer varying interpretations of the current market state. One trader highlighted a potential bearish pennant formation on the weekly chart, suggesting a possible movement toward lower major support levels if the formation is confirmed.
According to VanEck, Bitcoin’s network hashrate has decreased as of mid-December, suggesting a reduction in mining activity. Such drops in hashrate have typically coincided with market bottoms, based on historical data, although analysts advised that historical trends do not assure future results.
The cryptocurrency has faced challenges in regaining traction following its exit from the bull market channel, with market participants keenly observing key technical levels to evaluate the likelihood of recovery or further declines.
Bitcoin price and Christmas rally narrative: what to expect
Since 2013, BTC has finished December with positive returns only 5 times and negative returns 7 times; nonetheless, the average December return stands at approximately +4%, concealing fluctuations from about +47% to −35%.
Coinglass/Binance aggregations indicate that December tendencies are slightly favorable (around +4% for BTC), contributing to the “Santa rally” narrative, but the distribution is bimodal: significant rallies or sharp declines, rather than steady trends.
Recent analyses indicate that the Santa effect is diminishing: the substantial year-end surge in 2020 skews the data, while the past few years have shown considerably smaller, or even negative, holiday returns, making the “Christmas rally” narrative a weak edge at best.
