Why is Bitcoin price down today?

1 week ago 4

Bitcoin’s (BTC) price has dropped by more than 4% in the last 24 hours to reach around $97,000 on Dec. 10. That is also 6.40% below the all-time high of around $103,650, established five days ago.

Cryptocurrencies, Federal Reserve, Central Bank, Bitcoin Price, Bitcoin Regulation, Markets, Cryptocurrency Exchange, Interest Rate, BTC Markets

BTC drops ahead of key Microsoft vote

Bitcoin’s intraday drop appears ahead of a key Microsoft shareholders vote in which they would decide whether or not to add BTC to their treasury.

On Oct. 24, ahead of the United States presidential election, Microsoft included a section in its Form 14A filing with the US Securities and Exchange Commission (SEC). Titled “Assessment of Investing in Bitcoin,” the document suggests the company is evaluating Bitcoin as a potential asset diversification tool.

Despite the proposal’s inclusion, the “Board Recommendation” section advised shareholders to vote against it. Microsoft’s board of directors stated that the company’s management had already thoroughly evaluated the matter.

Interest in the keyword “Microsoft Bitcoin“ on the Google search engine has surged ahead of the vote on Dec. 10, according to Google Trend’s seven-day timeframe data. Increased search activity for crypto-related keywords often reflects curiosity among retail traders.

Today’s Bitcoin drop could be linked to trader caution ahead of the Microsoft vote, particularly given the board’s recommendation against adding BTC to the company’s treasury.

This may have tempered expectations, with traders positioning for a potential broader price decline following the vote's outcome.

Long-term Bitcoin holders realize profits

Bitcoin’s price decline in the last 24 hours appears after notable coin movements among traders holding BTC for 6-12 months.

These long-term holders have moved approximately 179,000 BTC between Dec. 4 and Dec. 7, according to data shared by on-chain analyst Mignolet.

“These 6-12 month holdings largely consist of Bitcoins accumulated during the extended consolidation period from March to October this year,” the analyst said, adding:

It is highly likely that these coins are now being realized as profits near the $100,000 level.

Bitcoin's ongoing price correction coincides with elevated daily relative profit/loss (P/L) ratio levels. The on-chain metric recently matched its all-time high from March 2024, a level previously observed when Bitcoin peaked at $73,400 in Q1 2024.

Historically, high P/L ratios signal profit-taking by long-term holders, often seen near market tops.

In some cases, however, a higher P/L ratio results in capital rotation, where selling pressure from profit-takers is absorbed by retail investors during bullish phases, akin to what happened during the 2020-2021 bull run.

Bitcoin risks drop below $90,000

Bitcoin’s price drop in the last 24 hours has appeared further due to weakening technicals.

First, the drop follows a growing bearish divergence between BTC’s rising prices and declining relative strength index (RSI) on the daily chart.

Simply put, Bitcoin’s upward momentum is weakening, which typically precedes a price correction such as the one happening today.

Second, Bitcoin’s drop is part of its prevailing rising wedge trend, where the price is rising inside two converging, ascending trendlines. On Dec. 9, BTC tested the wedge’s upper trendline as resistance, leading to a sharp decline toward its lower trendline support today.

Traditional analysts see rising wedges are bearish reversal indicators, resolving when the price breaks below the lower trendline and drops by as much as the wedge’s maximum height.

Applying the same technical rule puts Bitcoin’s downside target for December at approximately between $87,450 and $94,00, depending on the breakdown point.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Read Entire Article