After Bitcoin surged to a high of $100,000, it entered a correction mode, leaving many investors confused and torn, as they began to speculate whether this was a brief pause in a bull market or the end of the trend.
First, let’s analyze the key factor of Bitcoin's halving mechanism. As is well known, Bitcoin’s production is halved every four years. Historical data shows that after previous halvings, the market usually sees a real price peak about 1 to 1.5 years later. Based on this timing, the end of 2025 to early 2026 is more likely to be the peak moment for the market, and the current correction seems more like a halftime break. Comparing the magnitude of the current correction, it has only decreased by 30%. Looking back to 2017 and 2021, Bitcoin experienced significant corrections of 45% and 53%, respectively. In contrast, the current correction is not exaggerated. Additionally, the miner's cost line is currently around $78,000. If the price truly falls to this level, miners will be reluctant to sell their Bitcoin due to cost considerations, which will, to some extent, provide price support, acting like a natural moat.
Next, let’s turn our attention to the global monetary policy environment. There is an expectation that the Federal Reserve will cut interest rates next year, and other central banks may follow suit by increasing the money supply. Bitcoin has a high correlation with global money supply, and when the money supply in the market increases, it often drives the price of Bitcoin up. Recently, gold prices have reached new highs, reflecting the demand from large funds for value-preserving assets, and Bitcoin, as an emerging value-preserving asset, will naturally attract attention.
However, short-term risks cannot be ignored. Currently, there is $42 billion of long leverage within the price range of $70,000 to $75,000. If the price falls below this range, it could trigger a chain reaction, similar to knocking over dominoes, leading to a series of liquidations and further price declines. From a technical analysis perspective, $73,000 is a key support level. If this level can be held and the price breaks through the $90,000 mark, it can be confirmed that the correction has ended. Conversely, if the price falls below $83,000, it may further drop to the miner cost area.
In terms of operational advice, there are two points that need special attention. If the price can break through $88,000, it may start a new round of upward momentum, at which point it would be reasonable to consider increasing positions. However, if the price falls below $83,000, especially for investors holding high-position chips, it is best to set a stop-loss line around $82,000 to prevent a black swan event from causing all profits to be wiped out. It is essential to remember that the overall market is still in a bull cycle, and investors should not be easily swayed by short-term price fluctuations to exit their positions, while also being cautious about controlling leverage risk to avoid unnecessary losses due to excessive leverage.
The above content is for reference only. Investors need to consider their own situation comprehensively when making decisions.
