Is it a “normal” correction or the end of the bull market for Bitcoin and cryptocurrencies?

The landscape of the cryptocurrency industry can change dramatically in a matter of days. Recall that Bitcoin hit a new all-time high of over $108,000 on Tuesday, but the price has since fallen to $94,500.

This comes as Federal Reserve Chairman Jerome Powell said that despite President Trump’s promise, the central bank cannot buy Bitcoin and that no further major interest rate cuts will occur in 2025. This came after several statements warning that there may not be.

As Bitcoin reacted similarly to these comments, some in the crypto community are wondering if this is just a “normal” correction during a bull market cycle, or if the asset’s honeymoon after Trump’s win is over. Speculation is widespread.

bull market end side

Even before Donald Trump won a decisive victory, the price of BTC had already started to rise after the US Federal Reserve reversed its previous monetary strategy and started lowering interest rates. In fact, the first rate cut, when the central bank cut interest rates by 50 basis points, was the deepest, as they say.

Riskier assets such as Bitcoin immediately responded to the price increase. However, the Fed’s policy appears to be having a bigger impact on asset price movements than most expected.

In the end, the expected 25 basis point cut from Wednesday did not lead to further price increases. Just the opposite, central bank warnings about a possible reversal of strategy have spelled disaster for BTC and the entire crypto market.

As a result, those who say the bull market may be over have been given some vindication. If the Fed actually stops cutting rates, the BTC bull market could come to a screeching halt. Mr. Powell’s actions have already changed the behavior of U.S. investors in cryptocurrencies, with spot net outflows for Bitcoin ETFs marking their worst day since their inception nearly a year ago.

Some analysts believe that the $94,000 support zone is important for Bitcoin and is now nearing a test. If lost, assets could plummet to $90,000 or even $80,000.

just a correction

Captain Fabrik also outlined the importance of the $94,000 support line during this correction. They told X’s 100,000 followers that a price drop to that line would be a “healthy reset” that could propel the asset in the opposite direction and continue its multi-month rally. Ta.

$BTC #Bitcoin correction almost complete..!! https://t.co/GXWt21b5o6 pic.twitter.com/4d9QPO3kuk

— Captain Faibik (@CryptoFaibik) December 20, 2024

Crypto_Rover also took the position of “just a correction” and argued that this is the “last bear trap” and investors should not be shaken off.

If you survived the #Bitcoin bear market…

Don’t let this last bear trap derail the bull market.

Don’t give up now.

Your life may change dramatically over the next three months.

— Crypto Rover (@rovercrc) December 20, 2024

In any case, it seems as if the $94,000 support is indeed essential for BTC’s upcoming price movements. After several tests over the last week, Bitcoin is close to being tested again. Recall that after a second similar test on December 10th, the cryptocurrency rebounded and hit new highs just one week later.