Why did the prices of Bitcoin (BTC) and cryptocurrencies fall?

Basically, Bitcoin and cryptocurrency prices have fallen for two reasons. First, the US dollar rose strongly, pushing the markets and cryptocurrencies lower. Second, Bitcoin’s three-month cycle pointed to a local peak on December 19.

Although it is not fun to see the price of Bitcoin fall 12% in 72 hours, it was an unavoidable situation.

Here are the two reasons why the price of Bitcoin is falling, and why cryptocurrency prices are falling. Furthermore, there is a psychological effect ($100,000) at play which we will also explain.

In the long term, we will remain bullish as shown in our latest report Bitcoin price forecast research. In the short term, Bitcoin is clearly at risk as the Bitcoin price decline began at an important point in Bitcoin’s 3-month cycle (see below).

BTC Price Drop: It is a 3-month cycle

Bitcoin price reached a local high on December 18, one day earlier December 19.

Why do we emphasize December 19?

Because it was expected to be a local top in this current 3-month cycle.

Related to – 15 Cryptocurrency Predictions for 2025

As shown below, when looking at Bitcoin price through the lens of 3-month cycles, there are some important notes:

• BTC price started rising on October 10. See yellow arrow. This is 10 days in a 3 month cycle.
• History has shown that three-month cycles tend to have similar dynamics, certainly when there are strong trends.
• Therefore, the uptrend during this 3-month cycle was expected to end 10 days before the end of the cycle. With Christmas, our calculations pointed to a local peak on December 19th.

The BTC price drop chart says it all.

This was our first sentence Premium crypto research alert Sent to premium members on December 10:

As has been said several times in recent weeks, the The time window is from December 9 to 19 It is likely to provide resistance to the cryptocurrency markets; The expected result was a local top in BTC.

The 3-Month Cycle Chart, one of the seven variations of BTC charts we track for our members, has the answer.

The US dollar rose, and the price of Bitcoin fell

The second reason for the decline in the price of Bitcoin is related to the strength of the US dollar.

As shown in the following chart, the US dollar has risen sharply in recent days, after Federal Open Market Committee an average resolution:

US Fed rate cut: Powell warns about ‘more cuts’ sending stocks lower

The USD chart broke out yesterday, crossing the important 50% Fibonacci level. This is too much power for BTC to remain strong. A decline in the price of Bitcoin combined with a widespread decline in the cryptocurrency market is the expected result.

Bitcoin fell after reaching a psychological level

Another aspect that plays an important role is the importance of the $100,000 level.

It is a very important psychological level.

In fact, the $100,000 level is the point where accelerated movements begin, in both directions.

While Bitcoin has been rising, well above $100k, it is fair to expect market volatility to have the opposite effect.

Everything that happens around psychologically important levels is amplified – both Bitcoin price rises and Bitcoin price falls are strong around a critical level like $100k.

It will take a little longer before BTC decisively hits $100k. However, this is not a bad thing, as the recent rally has been a bit sharp and pronounced, leaving a lot of bulls in the mix; This is not a recipe for a sustainable move higher.

What’s next for Bitcoin?

While it is useful to understand what happened in the past (“Bitcoin Price Drop – What Happened?“), it is more important to understand what this means for the future.

What’s next for Bitcoin?

Frankly, we believe that the holiday season will be volatile for the Bitcoin and cryptocurrency markets.

• No, we are not expecting an accident.
• But there is also no upward continuation.

Bitcoin, like altcoins, needs to absorb the recent rally.

Moreover, cryptocurrency markets are becoming increasingly complex. Look at memes, for example, they were the first to go up but also the first to go down. The rotation within the cryptocurrency space is epic. We expect more of the same in the future.

This is how we guide our distinguished members on “What’s next for crypto markets?(Source: Last featured alert shared on December 15):

We believe a pullback is a higher probability outcome, and we can track Bitcoin Cash (BCH) + Litecoin (LTC) along with BTC trends to know for sure. If BCH+LTC moves above the 50% Fibonacci levels of, respectively, $580 and $130, we will know for sure that the bullish momentum will return.

We wrote this several days ago, long before landing. BCH + LTC now reach 50% Fibonacci levels; They started to fall below the 50% Fibonacci level and the major trend lines since December 17th.

By the way, why are we focusing on BCH+LTC? Not because it is a core element of our methodology but because Bitcoin is outperforming the cryptocurrency markets recently which means that Bitcoin forks, Bitcoin ecosystem tokens and BRC20 tokens need to confirm the bullish momentum in the cryptocurrency markets. They didn’t; Hence, there was no upward momentum. This is why we have been on the defensive since December 9th.

Whether January will be a strong month or a “buy the dip” month is something we are analyzing now, based on our timeline and cycle analysis.

If anything, Bitcoin’s seasonality suggests that February is a great month for BTC, so January could be a buy-the-dip month: Bitcoin Seasonal Charts: Want to Buy the Dip?

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We will direct our valued members towards the next DIP buying opportunity.