The holiday season is typically associated with a decrease in market activity due to the period of illiquidity that characterizes it. This phenomenon has been reflected in the daily Bitcoin payments, which have sunk to a yearly low.
Confirmed Bitcoin Payments: A Gauge of Investor Activity
According to data from blockchain.com, confirmed Bitcoin payments sank to 623,434 on Dec. 26, marking the lowest point of the year. This metric is significant as it provides insight into investor activity on the Bitcoin network. Confirmed Bitcoin payments refer to transactions that have been accepted and included in a block by the blockchain network’s consensus mechanism, making them irreversible.
Bitcoin Price Reaches All-Time High Amid High Liquidity
On Dec. 17, the price of Bitcoin crossed the $108,000 all-time high, securing over 857,000 confirmed payments. This is 37% more than yesterday’s 623,000 confirmed payments. The number of confirmed payments can be used to gauge investor activity on the Bitcoin network.
Analyzing Confirmed Bitcoin Payments and BTC Price
The chart below illustrates the correlation between confirmed Bitcoin payments and the price of Bitcoin.
Confirmed Bitcoin payments per day. 1–year chart. Source: Blockchain.com
Meanwhile, experts are expecting an imminent price recovery above $105,000 as the holiday period comes to a close. This is often associated with low institutional liquidity.
Weak Social Sentiment Suggests Imminent Price Recovery
The social sentiment around Bitcoin suggests that investors are bearish on the market. However, this could be a sign of a forthcoming Bitcoin breakout. According to Santiment’s Dec. 22 X post, "Vocal traders are now showing severe FUD, and that’s good news for contrarians who know markets move in the opposite direction of retail’s expectations."
BTC Social Media Sentiment: A Breakdown
The chart below illustrates the social media sentiment around Bitcoin.
BTC social media sentiment, comment ratio. Source: Santiment
However, other crypto analysts are also expecting an end to Bitcoin’s correction under $100,000. On Dec. 20, Bitcoin’s daily chart produced three consecutive red candles for the first time since the first week of November, which coincidentally was the lead-up period to Donald Trump’s US presidential election victory.
Post-Christmas Market Activity: A Catalyst for BTC Price
According to Ryan Lee, chief analyst at Bitget Research, "Post-Christmas, market activity typically picks up again, with funds expected to actively position for sectors that might benefit from Trump’s upcoming inauguration… The expected trading range for BTC this week is $94,000 – $105,000."
Donald Trump’s Inauguration: A Significant Catalyst for BTC Price
President-elect Donald Trump’s inauguration on Jan. 20 could be the next significant catalyst for Bitcoin prices. As reported by Cointelegraph, "Bitcoin in US Reserves: Could It Drive Prices to $500K?"
Conclusion
The holiday season has brought about a period of illiquidity in the market, reflected in the daily Bitcoin payments reaching a yearly low. However, experts are expecting an imminent price recovery above $105,000 as the holiday period comes to a close. The social sentiment around Bitcoin suggests that investors are bearish on the market; however, this could be a sign of a forthcoming Bitcoin breakout.
Recommendations
- Keep a close eye on the daily Bitcoin payments and price movements.
- Monitor the social media sentiment around Bitcoin.
- Consider investing in sectors that might benefit from Trump’s upcoming inauguration.
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