Bitcoin is struggling with the midline of its prolonged ascending channel around the $92K mark, teetering on the edge of a potential breakdown.

Despite this, the cryptocurrency has several key support levels ahead, fueling optimism for a possible bullish recovery in the near future.

Technical Analysis

By Shayan

The Daily Chart

Bitcoin has recently faced a notable correction, with the price currently stabilizing at the ascending channel’s middle trendline near the $92K mark. This level acts as a critical support zone, historically representing a significant area of demand. Despite this support, sellers have exerted considerable pressure, threatening to break below this key threshold.

In the event of a successful breach, Bitcoin could experience a cascade of long liquidations, potentially driving the price downward toward the 100-day moving average of $81K. This MA represents a robust dynamic support, likely to attract substantial buying interest and mitigate further downside momentum. Conversely, a rebound at the current level could see Bitcoin regain bullish momentum, aiming to retest the $108K upper boundary of the channel in the mid-term.

The 4-Hour Chart

On the lower timeframe, Bitcoin has breached the middle trendline of its multi-month ascending channel, signaling increased distribution among participants. This bearish development coincides with growing market uncertainty as investors anticipate potential volatility surrounding President Trump’s inauguration on January 20, 2025.

Currently, Bitcoin hovers near a critical support range defined by the $90K threshold and the Fibonacci retracement levels at 0.5 ($87K) and 0.618 ($82K). This region is a formidable barrier to further selling pressure and is expected to trigger a market reversal.

On-chain Analysis

By Shayan

Bitcoin market participants remain uncertain about the continuation of the bullish trend, with speculation revolving around whether higher prices are imminent or if the rally has concluded. A critical on-chain metric providing insight into this behavior is the realized price UTXO age bands, particularly for the 1-3 month (short-term) cohort.

The realized price for this cohort acts as a dynamic threshold, reflecting the average price at which these recent buyers acquired their holdings. When BTC sustains above this realized price, it signals growing bullish momentum, indicating that new buyers are confident enough to hold despite elevated levels. On the contrary, a price drop below this threshold suggests a heightened risk of a sell-off, as these participants enter loss territory and may resort to panic selling, increasing downward pressure on the market.

Currently, the realized price of the 1-3 month cohort resides at the $81K region, marking it as a critical support zone. This level is viewed as the primary defense line for buyers in the long-term outlook, with its ability to hold likely determining the broader market’s direction.

TL;DR

• Amid a broader meme coin decline, PEPE surged 6%, with its market cap surpassing $8 billion.
• Its revival happened shortly after Elon Musk changed his profile picture on X with a frog dressed as a Roman soldier.

PEPE on the Run

The latest crypto market correction has severely affected the meme coin sector, with many tokens charting substantial weekly declines. For instance, Shiba Inu (SHIB) is down 6%, while dogwifhat (WIF) has plunged 9%. 

The past 24 hours have also been painful for the bulls, with SHIB, BONK, PENGU, and many more heading south.

However, Pepe (PEPE) defied the negative trend, recording a 6% price upswing. The frog-themed token also saw its market capitalization rising above $8 billion again, solidifying it as the third-biggest meme coin.

PEPE’s resurgence could be linked to one of Elon Musk’s latest interactions on X. The owner of the social media platform changed his profile picture to Kekius Maximus – a frog that wears Roman armor. 

KEKIUS is a meme coin operating on multiple blockchain platforms, including Ethereum and Solana. It saw the light of day in mid-December and up until Musk’s post was trading sideways at approximately $0.01.

The endorsement from one of the richest people on the planet triggered a massive resurgence for KEKIUS, whose price skyrocketed by 550% in the past 24 hours. Nonetheless, its market capitalization remains below $100 million, meaning it is far from reaching the top 100 club (at least as of the moment). 

Musk and Memes

This is not the first time the billionaire has made waves in the meme coin niche with his posts on X. Musk is known as a huge proponent of Dogecoin (DOGE), often praising its merits and endorsing it on the social media platform. 

Last month, the biggest meme coin experienced a 10% price increase after Tesla’s CEO talked about the establishment of a Department of Government Efficiency (D.O.G.E.) should Donald Trump win the US presidential elections. The Republican emerged victorious and put Musk in charge of this division.

D.O.G.E. will aim to streamline the US federal government by reducing wasteful spending and eliminating unnecessary regulatory agencies. 

Floki Inu (FLOKI) is another meme coin that has witnessed a price boost after comments from Elon Musk. In February 2023, he posted a picture of his dog dressed as the CEO of Twitter (as X was called back then). Musk’s pet is named Floki, which explains why the eponymous meme coin shot by over 40% shortly after the interaction.

Software giant MicroStrategy’s stock has dropped over 36% from its November peak despite its commitment to an aggressive Bitcoin accumulation strategy.

Data from Google Finance shows that MSTR shares closed at $302.96 on December 30 after fluctuating between $301.75 and $320.01 throughout the day.

Mounting Bitcoin Holdings Amid Stock Price Struggles

The closing price was an 8.19% drop from previous levels, with another 3.19% scrapped off in after-hours trading, pushing the stock to as low as $293.59.

However, the biggest dip was observed when comparing MSTR’s highest level of $473.83, achieved on November 20, to its current price, which shows a 36% difference. The all-time high came on the back of MicroStrategy achieving a record $21.8 billion in 24-hour trading volume as it ramped up its BTC accumulation at a time when the asset was breaking price records of its own in quick succession.

The company is currently the biggest corporate holder of Bitcoin after securing another 2,136 BTC, bringing its stash to an impressive 446,400 BTC, with an estimated value of $41.4 billion. Nonetheless, the continued buying spree seemed not to have pushed MSTR out of its lethargy, with the stock failing to go beyond $411 in December.

That being said, across longer periods, MicroStrategy has still performed admirably. Over six months, it is up more than 121% while also gaining 342% year-to-date.

Bitcoin itself has faced a turbulent few weeks, dropping as low as $91,330 shortly after reaching an all-time high of $108,135 on December 17. At the time of writing, the world’s largest cryptocurrency by market cap was trading at $93,800, just 0.1% above its level from yesterday. Across 30 days, it has lost nearly 3% of its value, although over the last 12 months, the price reflects a 121% improvement.

Corporate Moves and Market Reactions

Interestingly, there seems to be a correlation between MicroStrategy buying BTC and repeated market corrections. Each acquisition, usually announced on a Monday, has triggered a price pullback, raising questions about the firm’s impact on the crypto market.

Critics like gold advocate Peter Schiff claim that the company’s purchases are no longer substantial enough to drive the cryptocurrency’s price higher. His comments coincided with BTC shedding 15% from its value, following hawkish signals from the Federal Reserve’s last FOMC meeting.

However, led by Executive Chairman Michael Saylor, MicroStrategy seems undeterred. Its Bitcoin holdings, bought at an average cost of $62,428, now boast an unrealized profit of over $13 billion.

Additionally, a recent announcement about a special shareholders meeting to propose increasing authorized shares and expanding financial options means the Virginia-based entity is preparing for future growth.