Key Takeaways
- Bitcoin's price declined to $42,200 on December 26, attributed to year-end profit-taking and tax loss harvesting;
- Binance's BNB and Solana's SOL outperformed Bitcoin, showing significant weekly gains;
- Solana's strong performance was driven by increased gas fees and airdrops, reaching its highest level since April 2022.
On December 26, Bitcoin witnessed a decline, reaching $42,200, down 2% for the day, marking its lowest point in nearly a week.
This weakening of BTC's price was attributed to seasonal trends affecting the cryptocurrency market during the holiday season.
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Analysts attributed the decline in Bitcoin's price to year-end profit-taking and tax loss harvesting.
Material Indicators noted that these factors created headwinds for BTC bulls, and market participants were closely watching whether Bitcoin could reclaim its 21-day simple moving average (21-Day MA), which stood at $43,115 at the time.
Furthermore, Keith Alan emphasized the importance of the 21-Day MA as a support level in recent months, highlighting its significance for traders.
Looking at the BTC/USDT order book liquidity on Binance, bids were observed at $37,000 and lower, indicating a bearish sentiment among traders during the latter half of December.
Popular trader Skew suggested that shorts in the market were positioning themselves for a potential price break below $43,000. In an X (formerly Twitter) post, he stated:
Looks more like shorts positioning for a break lower, in which these shorts will want to see continued spot selling else they will be forced to cover around $43K.
In contrast to Bitcoin's performance, Binance's BNB and Solana's SOL both exhibited strong weekly gains. BNB/USD saw a 19.5% increase, while SOL/USD surged by 56.8% over the past seven days. Ethereum (ETH) showed a more modest 1.6% gain in the same period.
Solana's impressive performance was attributed to increased gas fees and airdrops, with the cryptocurrency reaching nearly $126 on Christmas Day, its highest level since April 2022.
Michaël van de Poppe, founder and CEO of trading firm MN Trading, noted a significant trend change in the overall altcoin market cap, suggesting that the first quarter of the year could bring a substantial increase, possibly doubling the altcoin market capitalization.
As the cryptocurrency market heads into the new year, investors and analysts will be watching closely to see how these trends continue to evolve.
