1. Summary:
Bitcoin dipped to $92,000 following a leverage flush that punished late bulls in the market. The price weakness found support at familiar levels, with historical patterns playing out. The dip was attributed to a cascade of support loss and short-timeframe price weakness, with sell-side pressure notably seen on the largest US exchange, Coinbase. However, macro conditions benefited from cooler US inflation data on the day, as the Personal Consumption Expenditures (PCE) index came in below expectations.
2. Key Insights:
– Bitcoin experienced a dip in price, reaching $92,000, due to a leverage flush punishing late bulls.
– Historical patterns played out with the market revisiting $92,000 lows from earlier in December.
– Short-timeframe price weakness was attributed to sell-side pressure, particularly noticeable on the Coinbase exchange.
– Cooler US inflation data, as indicated by the PCE index, provided some relief in the market.
– The modest impact of the PCE data on market expectations for future Fed policy was reflected in the Fed target rate probabilities.
