“Normal” correction or end of the bull market for Bitcoin and Crypto?

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

This follows some remarks from Federal Reserve Chairman Jerome Powell, who warned that the central bank may not buy BTC despite Trump’s promises and that there may be no further interest rate cuts directors in 2025.

With Bitcoin’s reaction to these comments, it has led to speculation within the crypto community about whether this is just another “normal” correction during a bull market cycle or whether the asset’s honeymoon after Trump’s victory is over.

The end of the bull market

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

Riskier assets such as bitcoin responded with immediate price increases. However, the Fed’s policy appears to have a greater impact than expected on the evolution of asset prices.

After all, the expected 25 basis point reduction from Wednesday did not lead to further price increases. On the contrary, the central bank’s warning of another potential reversal in its strategy has resulted in a bloodbath for BTC and the entire crypto market.

Therefore, those who argue that the bull market could have ended have received some validation. If the Fed does indeed stop lowering rates, the BTC bull market could come to a screeching halt. Powell’s actions have already changed U.S. investors’ behavior toward cryptocurrency, as Bitcoin spot ETFs recorded their worst day in terms of net outflows since their inception nearly a year ago.

Some analysts believe that the $94,000 support zone is crucial for Bitcoin, which is about to be tested. In the event of a loss, the asset could drop to $90,000 or even $80,000.

Just one side correction

Captain Faibrik also highlighted that the $94,000 support line was crucial during this correction. They told their 100,000 followers on

$BTC #Bitcoin The fix is ​​almost complete..!! pic.twitter.com/4d9QPO3kuk

– Captain Faibik (@CryptoFaibik) December 20, 2024

Crypto_Rover was also on the “just a correction” side, saying this was the “last bear trap” and that investors should not be shaken.

If you survived #Bitcoin bear market…

Don’t let this latest bear trap derail you in this bull market.

Don’t give up now.

The next 3 months can really change your life.

– Crypto Rover (@rovercrc) December 20, 2024

Regardless, it appears that the $94,000 support will indeed be vital for BTC’s upcoming price movements. It was tested several times last week and Bitcoin is about to do it again. Recall that the cryptocurrency rebounded after the second such test on December 10 and reached a new all-time high just a week later.