Bitcoin (BTC) took a fresh step down on Dec. 26 as analysis blamed seasonal trends for BTC price weakness.
BTC price struggles after 2% drop
Data from TradingView showed BTC/USD hitting $42,200, down 2% on the day — its lowest in almost a week.
Neither a “Santa rally” nor a holiday surprise greeted Bitcoin bulls over Christmas, and ahead of the Wall Street return, crypto markets continued to struggle.
Commenting on recent BTC price moves, trading resource Material Indicators argued that the final days of 2023 were bound to create problems.
“Year end profit taking and tax loss harvesting are going to strengthen the headwind for BTC bulls,” a post on X (formerly Twitter) read.
“Watching to see if they can reclaim the 21-Day MA before tonight’s D candle close.”
Material Indicators referenced Bitcoin’s 21-day simple moving average, which at the time of writing stood at $43,115 — around $400 above the spot price.
Earlier, co-founder Keith Alan stressed the significance of the 21-day trendline as support in recent months.
Woke up to sub $43k #Bitcoin!
The 21-Day Moving Average has served as Technical Support for #BTC since mid October. It’s worth noting that we saw this key level breeched on December 17th (IYKYK). Bulls need to reclaim it to keep the rally going. pic.twitter.com/FXhUyMrO4G
— Keith Alan (@KAProductions) December 26, 2023
A printout of BTC/USDT order book liquidity on the largest global exchange, Binance, meanwhile, did little to lift the mood, this showing bids at $37,000 and lower increasing through the second half of December.
Continuing on order book trends, popular trader Skew likewise suggested that market participants were preparing for further downside.
“Looks more like shorts positioning for a break lower, in which these shorts will want to see continued spot selling else they will be forced to cover around $43K,” part of an X post explained on the day.
$BTC Binance / Bybit Open Interest & Delta
lol open interest has already been stacked back on here with tight price compression
~ often leads to volatility
looks more like shorts positioning for a break lower, in which these shorts will want to see continued spot selling else… pic.twitter.com/CSueEXEUU3
— Skew Δ (@52kskew) December 26, 2023
Solana retains lion’s share of major gains
Not all major cryptocurrencies fared as badly into the yearly close.
In contrast to Bitcoin and largest altcoin Ether (ETH), both Binance’s BNB (BNB) and Solana’s SOL (SOL) continued to put in impressive weekly performances.
BNB/USD and SOL/USD were up 19.5% and 56.8% over the past seven days, respectively, at the time of writing, while ETH/USD was just 1.6% higher.
Solana had benefited from a combination of increased gas fees and airdrops, hitting nearly $126 on Christmas Day — its highest since April 2022.
Previously, traders had eyed a chance for altcoins to shine as first-mover Bitcoin lost momentum.
For Michaël van de Poppe, founder and CEO of trading firm MN Trading, proof lay in a noticeable trend change for the overall altcoin market cap.
Total market capitalization for Altcoins is finally breaking out of a range of 500+ days,” he told X subscribers on Christmas Eve.
“Retest took place and found sufficient amount of support, which means that Q1 is likely bringing a 2x on the Altcoin market capitalization.”