Main Points:
- Bitcoin reached a historic high of ¥15.57 million (
$105,000) but later retreated to ¥14.7 million ($98,000). - Market movement influenced by geopolitical events, Federal Reserve statements, and technical indicators.
- Short-term overbought signals suggest caution, but long-term bullish trends persist.
- Upcoming U.S. economic data, such as employment and inflation, may drive market sentiment.
- Historical cycles indicate further room for growth despite temporary corrections.
Bitcoin’s price action in the first week of December 2024 has drawn attention worldwide as it approached and briefly exceeded the psychological $100,000 mark. This week’s analysis by bitbank’s analyst, Hasegawa, highlights the interplay of geopolitical tensions, Federal Reserve decisions, and technical indicators in shaping Bitcoin’s volatile journey. While short-term correction risks loom, historical patterns and on-chain data suggest room for continued growth in the longer term.
Bitcoin’s On-Chain Data Insights
Transaction and Address Activity
On-chain activity shows robust engagement, with active address counts and transaction volumes steadily increasing. Monthly trends indicate sustained interest in Bitcoin despite price volatility.
Mining Pool Dynamics
Bitcoin mining pools remain a critical pillar of market stability. Significant transfers from pools to exchanges have fueled speculation about miners cashing out, potentially applying downward pressure on prices.
Weekly Market Overview
Volatility and Recovery
The week began with Bitcoin trading near ¥14.8 million (~$98,000) before facing a series of events that injected volatility:
- Geopolitical Unrest: South Korea’s President declared martial law, causing market panic and briefly pushing Bitcoin below ¥14 million (~$92,000).
- Federal Reserve Commentary: Comments from Fed officials on potential rate cuts boosted market confidence, driving prices back above ¥15 million (~$100,000).
- Profit-Taking: As Bitcoin crossed the $100,000 milestone, profit-taking intensified, leading to a sharp correction.
Technical Analysis and Indicators
PSP Ratio and Overbought Signals
The Profitability of Spent Coins (PSP) ratio has breached 95%, a level historically associated with overbought conditions. However, past bull cycles (2013, 2017, 2021) show that Bitcoin can sustain rallies even after hitting these levels.
Halving Cycle Analysis
Bitcoin’s price trajectory remains aligned with historical halving cycles. Major price peaks typically occur 371–546 days after a halving event. With only 230 days since the last halving in April 2024, the current cycle suggests that the market is still in its early to mid-bull phase.
Macroeconomic Factors at Play
U.S. Economic Indicators
Upcoming data releases, including November’s employment report and inflation metrics (CPI and PPI), will likely influence Bitcoin’s short-term price movements:
- Employment Report: Strong numbers could dampen rate cut expectations, pressuring Bitcoin.
- Inflation Data: A softer CPI could support further rate cuts, boosting Bitcoin sentiment.
Federal Reserve Decisions
With the Federal Open Market Committee (FOMC) meeting scheduled later in December, any hints about future monetary policy will significantly impact Bitcoin’s trajectory.
Long-Term Projections
While the short-term outlook warrants caution due to overbought signals, historical data underscores Bitcoin’s long-term growth potential:
- Previous cycles indicate that Bitcoin often continues to climb, even after corrections.
- The current halving cycle’s performance remains modest compared to past cycles, leaving room for further upside.
Bitcoin’s journey toward and beyond the $100,000 milestone exemplifies the interplay of macroeconomic factors, technical signals, and historical patterns. While short-term corrections are possible, the broader bull market appears intact, supported by on-chain metrics and halving cycle dynamics. Investors should remain cautious but optimistic as Bitcoin continues to establish itself as a key player in the digital asset space.
