technicals point to a 20% dip

Bitcoin price continued its strong downtrend even after MicroStrategy and Tether announced new acquisitions.

Bitcoin (BTC) traded near the $91,000 level on Monday, December 30, down 15% from this year’s high, and technical data suggests further downside is ahead.

This decline continued despite MicroStrategy announcing last week that it had purchased another 2,138 Bitcoins, marking the eighth consecutive week of purchases and bringing its total holdings to 446,400.

Tether also added 7,630 Bitcoins, bringing its total assets to over $7.7 billion. Other major companies such as Marathon Digital, Riot Platforms and Hut 8 Mining also continued to increase their Bitcoin reserves.

Bitcoin’s decline can be attributed to profit-taking by investors who benefited from its more than doubling this year. The decline is also due to market risk aversion sentiment, as evidenced by the rise of the US dollar index to $108.14 and significant declines in the Dow Jones and Nasdaq 100 indexes, which fell 670 and 320 points respectively.

Another contributing factor may be concerns about bond vigilantes awaiting Donald Trump’s presidency. Bond vigilantes often push bond yields higher when budget deficits rise.

These dynamics have pushed the 30-year yield to 4.76% and the 5-year yield to 4.3%, close to this year’s highs. As we wrote before, there are concerns that rising bond yields could lead to downside risks in crypto and the stock market in 2025.

Bitcoin price may drop to $73,780 Bitcoin chart | Source: crypto.news

The daily chart shows that BTC has experienced a sharp pullback in recent days. It has turned the 50-day Exponential Moving Average into resistance and is currently trying to break below the key support at $91,430, a level it has tested three times this month without breaking.

Additionally, Bitcoin appears to have formed a head and shoulders formation, a widely recognized bearish trend indicator. It also broke below $93,750, which is the weakness, stop and reversal point of the Murrey Math Lines.

As a result, Bitcoin could fall to the next major support level at $73,780, the high on March 14. If this happens, Bitcoin could see another decline of around 20% from its current price.