Journalist
Posted:
Bitcoin is still lagging alongside the entire crypto market which is below the $3 trillion mark in valuation. But why is this so?
Bitcoin loses 50-week SMA
Usually, every time Bitcoin [BTC] has had its halving, a parabolic run in price has followed. However, this time round, this is not the case. BTC price rallied to a high in the upwards of $126,00 but has since retraced back.
Bitcoin has closed higher in the following year after halving since 2016. However, 2025 is different on Christmas Day as per data from CoinGecko.
Price closed at $98,696 in 2024 but now trades lower, around $87,641 when writing.
On the charts, Bitcoin [BTC] has lost the 50-week support level and the RSI divergence indicator is also bearish.
As per Ali Charts, every time this has happened, BTC has dropped on average by 60%. This projects to a fall towards $40,000, though this looked far-fetched. However, this potential drop cannot be overlooked.
Source: TradingView
Apart from the technical weakness, the cryptocurrency is losing on the fundamental and network fronts.
How about Bitcoin correlation with Nasdaq and gold!
On the fundamental side, Bitcoin has almost lost its correlation with the Nasdaq and gold. The latter two are strengthening gradually, but BTC is still lagging.
The cryptocurrency is no longer trading as a safe haven rather independently. Its correlation with the Nasdaq is near zero, while that of gold is negative.
Source: CryptoQuant
Additionally, analysts were bearish on BTC’s outlook. Jim Cramer was 100% bearish, which coincided with the sentiment timeline. This further indicates the post-halving aftershocks in Bitcoin which have been felt across the whole sector.
Exchanges and US retail investors are selling
Furthermore, exchanges and US participants were selling Bitcoin massively. The United States was the biggest seller while Asia was the largest buyer, as per Ted Pillows.
In fact, retail traders holding less than 1 BTC had been dropping since March 3rd.
Also, Binance, Coinbase, Bybit and Bitfinex were selling BT,C which further derailed the parabolic rally that follows the post-halving year. This could have resulted from profit-taking as BTC clocked $126,000+ this year.
Source: OxNobler
Adding all these together explains why Bitcoin’s real parabolic run has not started. Capital has flowed out of Bitcoin due to institutions, whales and retail selling.
On top of that, the asset lost its safe-haven correlation with gold and a weak technical setup. That said, Bitcoin could continue trending down. The current correction started on October 8th and was amplified two days later with massive liquidations across the sector.
Final Thoughts
- Bitcoin trades below the close of 2024, exhibiting a difference in other years that followed the halving.
- Bitcoin’s rally was derailed by loss of correlation with gold, breakdown in price action and massive selling.