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Highlights
- Bitcoin price cracked 4% as US equity futures slipped on news of Trump tariffs, PCE data and profit booking.
- $9.4 billion in Bitcoin options set to expire on Friday, which will trigger more volatility.
- If Bitcoin follows the global M2 supply, it could possibly see 20-25% decline in the coming days.
- BTC price hit an intraday low of $92,785.
The Bitcoin price has dropped over 4% hitting an intraday low of $92,785 following several rejections at the $100,000 level. This marks the largest single-day decline for BTC since Donald Trump’s victory in the US elections. Factors contributing to today’s drop include the monthly expiry of Bitcoin options, concerns over Trump’s proposed tariffs, partial profit-taking, and ETF outflows
Why Bitcoin Price Tumbles Below $93K?
Bitcoin price dropped 4% taking a dive under $93,000 before recovering back above the crucial support level of $94,000. Despite the rebound, the sentiment towards $100K has faded. As of press time, BTC price is trading nearly 4% down at $94,512 with its daily trading volume climbing 60% to $84.84 billion.
Donald Trump Raises Tariffs on Imports from China, Mexico, Canada
President-elect Donald Trump’s decided to impose additional tariffs on imports from China, Mexico, and Canada, reported Reuters on November 26. Along with the fall in US equity futures, Bitcoin and the broader crypto index also came under strong selling pressure.
On the other hand, the US dollar gained ground with the spot Dollar Index jumping 0.7%. Kieran Calder, head of equity research for Asia at Union Bancaire Privee told Bloomberg:
“The incoming president has started early but this could be a surprise only to those who have forgotten 2016-to-2020. This is President Trump’s negotiating style: step one, punch in the face, step two, let’s negotiate.”
Trump’s remarks dampened the market optimism on Monday following the appointment of Scott Bessent as US Treasury Secretary over the last weekend. Bitcoin and altcoins also corrected in Asia’s early trading hours on Tuesday.
However, the recent Bitcoin retreat is “a much needed pullback to work off overbought readings, rather than a reversal lower or anything sinister” said Tony Sycamore, an analyst at IG Australia Pty Market. “It also provides a reminder that markets, even crypto markets, don’t move in straight lines indefinitely.”
Meanwhile, Trump administration plans to have a crypto advisory council operating from the White House that will work on the strategic Bitcoin reserve policy.
Bitcoin Price Volatility Before Monthly Expiry
A total of $9.4 billion in Bitcoin options contracts will expire on Friday which could trigger a strong Bitcoin price volatility moving ahead. As per the Deribit derivatives data, the put/call ratio is currently at 0.83 while the max pain point is at $78,000. Also, the daily trading volume of Bitcoin options has shot up by 124% to $4.47 billion while the open interest has jumped 2% to $42.6 billion.
The majority of open interest is focused on call options at the $82,000 strike and put options at the $70,000 strike. According to the max pain theory, the price could gravitate toward the $70,000–$82,000 range.
Eyes on US PCE Inflation Data
The core PCE data will come out on Wednesday, which could shape the week’s key event triggering major moves in USD and Gold. Thus, it would also have a consequential impact on US equities, Bitcoin and crypto simultaneously.
The core PCE index, a critical gauge of inflation, is anticipated to show an increase, which could impact the Federal Reserve’s approach to interest rates.
Chris Weston, an analyst at Pepperstone, noted that a rise in the core PCE index might dampen hopes for a December rate cut. Such an uptick could indicate ongoing inflationary pressures, prompting the Fed to sustain current interest rate levels to maintain economic stability.
What’s Next for BTC Price?
Just as the Bitcoin price slipped under the crucial support levels of $94,000, popular crypto analyst CrediBULL Crypto has advised caution on building further long positions for the asset. He said that the recent drop under $94K has opened the doors to $80,000, but it would not happen immediately.
Well that is local inval officially hit- which means our LTF impulse from 94k was just part of a 3 legged corrective move up rather than continuation of the next major impulse to our upper targets.
Stopped out of my BTC long and won't take another position until I get more… https://t.co/mFqcrnnf1b pic.twitter.com/28O774bn3r
— CrediBULL Crypto (@CredibleCrypto) November 25, 2024
Another popular Bitcoin analyst Joe Consorti stated that since September 2023, Bitcoin’s price has closely followed global M2 money supply trends, with a lag of approximately 70 days. He cautioned that if this correlation persists, Bitcoin could face a significant correction of 20-25% in the near term.
On the other hand, big players continue to accumulate more BTC. On Monday, MicroStrategy purchased 55,000 Bitcoin, with Bernstein analysts raising the MSTR stock target to more than $600. Similarly, Semler Scientific also announced a fresh BTC purchase yesterday.
This accumulation trend among whales highlights the belief that they have in Bitcoin and its potential to rally above the $100,000 milestone, when that happens. VanEck’s Chief Matthew Sigel recently predicted that the flagship crypto could rally to as high as $180,000.
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