Originally published on: December 06, 2024
Bitcoin has shown remarkable resilience by climbing back above $100,000 following a flash crash that saw its price briefly dip to $90,500 on December 5th.
In the midst of a 14% decline from its all-time high of $104,600, Bitcoin has managed to bounce back with a 4.57% rally on the daily chart, maintaining a bullish position above key exponential moving averages (EMAs) on the four-hour chart.
The sudden drop in Bitcoin’s price occurred within just one hour, with the candle recording highs and lows at $99,105 and $90,500, respectively. This event resulted in over $400 million in liquidations, marking the largest liquidation event since 2021.
Despite this, there is a silver lining. The open interest-weighted funding rate for Bitcoin underwent a reset, dropping from 0.09% on December 4th to 0.01% on December 6th. Analysts like Byzantine General see this as a positive sign for Bitcoin’s future performance.
Speaking of futures metrics, Bitcoin futures analyst Byzantine General pointed out the reset in the funding rate and other factors that suggest Bitcoin is in a strong position. The fluctuations in the funding rate, aggregated open interest, and spot premium all indicate a more stable futures market compared to recent days.
After the volatility on December 5th, Bitcoin’s one-day chart revealed a bearish spinning top candlestick pattern, signaling uncertainty as buyers and sellers push the price in different directions. However, historical patterns suggest that this could be a temporary setback before a bullish continuation.
Notably, similar spinning top candle patterns were observed when Bitcoin crossed key milestones like $1,000 and $10,000. Past instances saw short-lived bearish volatility followed by sustained upward movement in price.
Based on Fibonacci extensions, the immediate target for Bitcoin is set at $115,000, representing a 15% increase from the $100,000 level. With the relative strength index (RSI) showing potential for further gains, a breakout could push prices as high as $124,500.
As we approach the end of the year, Bitcoin’s resilience and potential for growth continue to attract attention from investors and traders alike. Keep an eye on key market trends and indicators to stay informed about the latest developments in the crypto world.
