Bitcoin (BTC) Analysis: Will It Hit $115K or Drop Below $80K Next?

Bitcoin’s (BTC) price has dropped to $95,824.49, with a 24-hour trading volume of $48.75 billion. 

Over the past day, the cryptocurrency fell by -0.65%, and it has recorded a -8.21% decline in the last week. With 20 million BTC in circulation, Bitcoin’s market capitalization now stands at $1.9 trillion.

Over the past two weeks, the market has shifted from bullish to bearish sentiment. This change has coincided with corrections in altcoin market caps and declining interest in meme coins. 

However, attention has turned back to Bitcoin, with some viewing this as a normal phase in the cycle and an opportunity for strategic investors.

Mayer Multiple and Current Market Trends

The Mayer Multiple (MM), which measures Bitcoin’s price relative to its 200-day moving average (200DMA), is at 1.38. This level suggests Bitcoin remains in a bullish cycle, as it is well above its 200DMA but below the overvaluation threshold of 2.4.

Historically, the MM has provided insights into Bitcoin’s cycles. Peaks at or above 2.4 align with market tops, while lows near 0.8 signal undervaluation. 

Bitcoin’s current price action points to ongoing bullish momentum, with potential room for further growth before reaching a cycle peak.

According to Ali (@ali_charts), Bitcoin could reach a market top above $168,500 based on MM data. However, the analyst also warned of a key support zone between $97,041 and $93,806. If this level fails to hold, Bitcoin’s price could decline sharply to $70,085, as there is little support below.

The key support zone for #Bitcoin $BTC now lies between $97,041 and $93,806. If this critical demand area doesn't hold, we could see a sharp drop to $70,085, as there’s minimal support below. pic.twitter.com/cHdr5mKxhi

— Ali (@ali_charts) December 22, 2024

Adoption of Top Cryptocurrencies Grows

Despite the price drop, long-term adoption of Bitcoin and other cryptocurrencies continues to rise. Over the last two years, the number of non-empty wallets has grown significantly across the top four digital assets by market cap:

• Bitcoin (BTC): 54.7 million wallets (+27%)
• Ethereum (ETH): 134.9 million wallets (+47%)
• Tether (USDT): 6.57 million wallets (+66%)
• XRP (XRP): 5.75 million wallets (+28%)

This growth highlights increasing interest in cryptocurrencies, driven by both institutional and retail participants. These trends suggest strong underlying fundamentals that support the market, even amid short-term price fluctuations.

Key Price Levels to Watch

Market liquidity is becoming a critical factor as Bitcoin approaches 2025. Trader Mark Cullen pointed out two important levels: $115,000 on the upside and $80,000 on the downside.

These levels represent areas where significant liquidations are likely to occur if Bitcoin’s price reaches them.

Cullen remarked, 

“Liquidity is stacked up like presents under the Christmas tree at 115k and at sub 80k. The big question: Which level gets hit first?”

The holiday period often brings heightened volatility due to reduced liquidity during out-of-hours trading.

A drop to $80,000 would represent a typical bull market correction in line with past cycles, while a push to $115,000 could mark the next phase of Bitcoin’s rally.

Bullish Signals Amid Market Challenges

The TD Sequential indicator on Bitcoin’s 4-hour chart has flashed a buy signal, suggesting a possible price rebound. While bearish sentiment dominates, analysts see the potential for a recovery that could push Bitcoin to new highs in the coming months.

The TD Sequential presents a buy signal on the #Bitcoin $BTC 4-hour chart, anticipating a price rebound! pic.twitter.com/acDIusZCkW

— Ali (@ali_charts) December 22, 2024

As traders monitor key support and resistance levels, Bitcoin’s long-term outlook remains strong, supported by growing adoption and increasing wallet activity. Market participants are preparing for potential price swings as the cycle evolves.

FAQs:

What is Bitcoin’s current Mayer Multiple (MM)?

Bitcoin’s MM is at 1.38, suggesting moderate bullish momentum below the overvaluation zone (2.4).

What are the critical support and resistance levels for Bitcoin?

Key support is $93,806, while resistance stands at $115,000. A drop to $80,000 is possible.

How has cryptocurrency adoption changed over the past two years?

Non-empty wallets for Bitcoin have grown by 27%, with Ethereum, Tether, and XRP seeing significant increases too.