Bitcoin price went into a technical correction and found support at the 50-day moving average.

Bitcoin (Bitcoin) to $94,830, down more than 12% from this month's high as Santa Claus's rally failed to materialize.

The pullback occurred in a low-volume environment, as many investors and traders remained in Christmas season mode.

according to Queen GekkoBitcoin trading volume of $22 billion on Sunday, December 29, fell from $41 billion the day before. On Friday, its volume reached $45 billion, higher than $33 billion on Thursday. Bitcoin tends to have a daily volume of over $100 billion in normal market conditions.

Bitcoin lost momentum after the Federal Reserve held an extremely hawkish monetary policy meeting earlier this month. He cut interest rates by 0.25%, while his dot chart indicated only two cuts. The Fed has hinted that it will provide up to four cuts in 2025.

Bitcoin has also suffered due to doubts about A Bitcoin Strategic Reserve ETF inflows declined. The odds that Donald Trump will create these reserves in the first 100 days have fallen to 29%, down from a November high of 60%.

Meanwhile, ETF inflows have been sluggish in the past few days. Data by SoSoValue It shows that Bitcoin ETFs have shed their assets on 6 of the last 7 market days. These funds have accumulated net assets worth $35.6 billion since their inception.

Will BTC have an impact in January?

The so-called Santa Claus rally, where assets rise before December 25, has not come to fruition. Therefore, Bitcoin investors are hoping that it will achieve the so-called January effect – a theory that suggests that most financial assets (i.e. stocks and cryptocurrencies) rise in the first month of the year as participants build their investment portfolios.

History suggests that Bitcoin does not necessarily make strong gains in January. As shown below, Bitcoin has been positive six times since 2023. It was up just 0.62% in January of this year and 39% the year before.

February is usually a strong month for Bitcoin; It only moved red twice.

Bitcoin price is at a crucial support level

The daily chart shows that Bitcoin is at a crucial support level, which could indicate further gains in the coming weeks. It found support at the 50-day moving average. The currency also failed to move below the uptrend line that connects the lowest volatility since November 17.

However, the risk is that the currency has formed an expanding rising wedge pattern, which is a common bearish signal. Therefore, a drop below the lower side could indicate further downside, perhaps reaching $73,777, the March high.

An alternative scenario is for Bitcoin to bounce back and retest the top side of the wedge at $110,000.