The post 5% dip in Bitcoin: How retail psychology affects BTC’s moves appeared on BitcoinEthereumNews.com.

Bitcoin’s recent 5% dip to $95K isn’t a typical shakeout of weak hands. With all economic signs pointing to a volatile rally ahead, it’s time to stay sharp and cautious. A week of relief, and the crypto market delivers another twist. Bitcoin [BTC] printed a glaring red candlestick on its daily chart, signaling a 5% drop. Surprisingly, overheating isn’t the culprit here. So, who’s pulling the strings this time? The buzz points to another case of potential “manipulation”. With no technical signs warning of a downturn, this drop feels more like a calculated move than a market correction. Either way, the risk is sky-high New data just dropped, revealing strong PMI numbers, high job openings, and a surprisingly resilient U.S. economy. But what followed? A sharp crash in volatile assets, marking the second such blow in under a month. Bitcoin’s first crash saw it tumble to $91K, just two weeks after hitting a record high of $108K. But, in true Bitcoin fashion, it bounced back quickly, reclaiming $100K in just seven days. Similarly, this latest drop in BTC could be a bullish sign. Despite the dollar index [DXY] hitting a two-year high of 109.27, a 5% dip still shows strength.  Additionally, Bitcoin has a track record of bouncing back, especially when institutional investors swoop in to scoop up liquidity, meaning a potential supply shock could be looming. However, there’s one cloud hanging over this recovery: the “high-risk” sentiment gripping the market. With over $114 million in long positions wiped out, Funding Rates are steadily declining.  Source: CryptoQuant This is creating a psychological barrier, particularly for retail investors and day traders, who might be waiting for the right moment to re-enter for better profits. The key? If the gap between $102K and the new price is wide enough, it could be…

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Filed under: News - @ January 9, 2025 8:22 am