The landscape in the cryptocurrency space can change drastically in days. Recall that bitcoin tapped a new all-time high of over $108,000 on Tuesday, but its price has slumped to $94,500 since then.

This came after a few remarks by Federal Reserve Chair Jerome Powell, who warned that the central bank could not purchase BTC despite Trump’s promises and that there might not be any more key interest rate reductions in 2025.

With bitcoin reacting the way it did to those comments, this has led to speculations among the crypto community about whether this is just another ‘normal’ correction during a bull market cycle or whether the asset’s post-Trump-victory honeymoon is over.

Bull Market’s End Side

Even before Donald Trump’s decisive victory, BTC’s price had already started to appreciate after the US Federal Reserve pivoted from its previous monetary strategy and started lowering the interest rates. In fact, the first cut was the deepest, as they say, when the central bank reduced the rates by 50 basis points.

Riskier assets such as bitcoin reacted with immediate price increases. However, the Fed’s policy seems to have a bigger impact on the asset’s price movements than many anticipated.

After all, the expected 25 basis point reduction from Wednesday didn’t lead to another price increase. Just the opposite, the central bank’s warning about another potential reversal in its strategy resulted in a bloodbath for BTC and the entire crypto market.

Consequently, those who argue that the bull market might have ended received some validation. In case the Fed indeed stops cutting the rates, BTC’s bull market might come to a screeching halt. Powell’s actions have already changed US investors’ behavior toward the cryptocurrency, as the spot Bitcoin ETFs recorded their worst day in terms of net outflows since their inception nearly a year ago.

Some analysts believe the $94,000 support zone is crucial for bitcoin, which is close to being tested now. If lost, the asset could plummet to $90,000 and even $80,000.

Just a Correction Side

Captain Faibrik also outlined the $94,000 support line as crucial during this correction. They told their 100,000 followers on X that such a price drop to that line would be a “healthy reset” and it could propel the asset in the opposite direction and continue its months-long rally.

$BTC #Bitcoin Correction is almost Done..!! https://t.co/GXWt21b5o6 pic.twitter.com/4d9QPO3kuk

— Captain Faibik (@CryptoFaibik) December 20, 2024

Crypto_Rover was also on the ‘just a correction’ side, claiming that this is the ‘final bear trap’ and investors should not be shaken out.

If you survived the #Bitcoin bear market…

Don’t let this final bear trap shake you out this bull market.

Don’t give up now.

The next 3 months can truly change your life.

— Crypto Rover (@rovercrc) December 20, 2024

In any case, it seems as if the $94,000 support will indeed be vital for BTC’s upcoming price movements. It was tested on a couple of occasions last week and bitcoin is close to doing it again. Recall that the cryptocurrency bounced off after the second such test on December 10 and marked a new all-time high just a week later.

TL;DR

• XRP experienced a sharp decline, briefly falling below $2.20 following a broader crypto market correction.
• Despite the dip many analysts foresee the asset rebounding to targets as high as $5, with some projecting even greater peaks if a FOMO-driven rally occurs.

XRP Follows the Market Decline

Despite the enhanced volatility, the first half of December has been quite successful for Ripple’s XRP. At the start of the month, its price surpassed a multi-year high of $2.80, while at the beginning of this week, it consolidated above $2.50.

However, things took a sudden turn on December 18, with XRP plunging below $2.30. Several hours ago, the valuation dipped under $2.20. Currently, XRP is around $2.23 after a slight rebound, which represents a 6% decline on a daily scale. 

Perhaps the most obvious factor that has impacted the price of the token is the severe correction of the entire cryptocurrency sector. The global crypto market capitalization is down almost 9% in the last 24 hours, currently set at around $3.42 trillion (CoinGecko’s data).

Bitcoin (BTC), which hit a new all-time high of over $108,000 on December 17, is now worth less than $96,000. Ethereum (ETH) tumbled below $3,300, while Solana (SOL), Dogecoin (DOGE), Cardano (ADA), and many more are down by double digits. 

The market started bleeding heavily shortly after the Federal Reserve announced its latest interest rate cut. It reduced the benchmark by 0.25%, but Jerome Powell hinted that next year, the policy might be halted due to an increase in the inflation rate. 

In addition to that, the spot Bitcoin ETFs witnessed their biggest outflows in a single day. As CryptoPotato reported, over $670 million were withdrawn from the financial vehicles in total on a 24-hour scale, with Fidelity’s FBTC and Grayscale’s BTC leading the pack – $208.5 and $188.6 million, respectively.

XRP’s Next Potential Targets

Despite the substantial plunge, numerous analysts remain optimistic that XPR’s bull run is far from over. The popular X user Crypto Bitlord believes the latest correction has represented a local bottom, after which XRP could surge to as high as $5. 

Other market observers who recently chipped in are Dark Defender and Armando Pantoja. The former set $5.85 and $8.76 as short-term targets, while the latter assumed XRP could be headed toward $2.78 and then $3.87. Pantoja went even further, predicting a mass FOMO effect if the price reach $10-$12, and “that’s when it will get crazy.”

Bitcoin’s massive rise from under $70,000 to over $108,000 within a month and a half after Donald Trump’s landslide victory in the US presidential elections left some investors outside the circle.

However, the ever-volatile nature of BTC always leads to substantial corrections that provide opportunities for those who missed the initial train to get on board. In the past couple of days, bitcoin’s price tumbled by double-digits, which, according to Santiment, has made the crowd seek to buy the dip.

Moreover, history shows that it could send BTC flying again.

Is BTC About to Bounce?

As the analytics platform noted, the last time these discussions exploded in a similar manner was in early August when the cryptocurrency’s price tumbled below $50,000. Just a few days later, though, the asset had climbed by over 25% to beyond $62,000.

If history is to repeat itself now, even though BTC’s market cap is a lot higher, bitcoin could recover from its big retracement and head toward a new all-time high again of over $120,000.

With Bitcoin falling as low as $95.5K today, the ratio of crypto discussions that are about buying crypto’s dip has reached its highest level in over 8 months. The last time we saw the crowd nearly this enthusiastic about dip buying was the major crash on August 4th. Since… pic.twitter.com/39NlpnGMCs

— Santiment (@santimentfeed) December 20, 2024

Not So Fast

Although the ‘buy-the-dip’ history shows that BTC’s correction could be over, this narrative is not supported by other on-chain and technical metrics, such as one particular demand zone.

IntoTheBlock posted even before bitcoin lost the $100,000 mark decisively yesterday that such an area had formulated at around $97,500, given the large number of investors purchasing at such prices more than 1.4 million BTC. These accumulations turned that level into an ‘important’ support zone, which has now been broken to the downside.

Once such vital support lines are breached and investors who had entered recently see their positions in the red, at least on paper, many tend to dispose of their holdings, which leads to more intense selling pressure for the underlying asset.

Will Bitcoin retrace below $100k?

Interestingly, a significant demand zone has formed just under $100k.

Over 1.45 million BTC was accumulated at an average price 97.5k, making this an important potential support zone. pic.twitter.com/vDcHEl8OKV

— IntoTheBlock (@intotheblock) December 19, 2024