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Bitcoin's Bull Run Could be Tested if BTC Falls Below $91K: Van Straten
Bitcoin has had two 15% corrections since Donald Trump won the U.S. election.
Updated Jan 27, 2025, 11:26 a.m. Published Jan 27, 2025, 11:22 a.m.
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What to know:
- Nasdaq futures have sold off as much as 4% due to concerns around China's DeepSeek AI model.
- Bitcoin's short-term holder cost basis is around $91,000, which is approximately a 15% correction from the all-time high.
Bitcoin fell just below $98,000, a near 10% drawdown from all time highs, with investors questioning the continuation of the bull run.
The fall was attributed to the concerns about China's DeepSeek Artificial Intelligence hyper-efficient model competing with the U.S. industry at a fraction of the cost.
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Since President Trump won the U.S. election, bitcoin has jumped from $66,000 to new all-time highs of $109,000. During the rally BTC corrected as much as 15% twice, in addition to multiple double-digit drawdowns. Therefore, bitcoin's 10% drop seems in line with previous drawdowns.
A reliable indicator of support during a bull market is the short-term holder cost basis, which is the average on-chain cost for coins that have moved within the last 155 days. This level is around $91,000 at the moment, which means if BTC falls below that point it could put a strain on the bull run.
But bearish sentiment is already starting to heat up, as funding rates for bitcoin have started to go negative. Also Arthur Hayes, co-founder of Bitmex, is calling for a correction between $70,000-$75,000, before seeing $250,000. CoinDesk's Omkar Godbole also reported that bitcoin may drop to $75,000 should it trigger a so-called 'double top' bearish reversal pattern.
The drawdown hasn't been contained to just crypto; U.S. markets are selling off, with Nasdaq futures down as much as 4%.
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