Sunday brought a sharp drop in Bitcoin prices, as the leading cryptocurrency slid to a low of $92,941 per coin. This marks a significant shift, as BTC had been comfortably trading above $95,000 just a day earlier. The overall cryptocurrency market saw a decline of 1.61%, with Bitcoin itself down by 1.42% in the last 24 hours. The holiday season seems to be taking its toll on trading activity, as volumes have dwindled and market sentiment remains subdued.

Market Dynamics Amid Quiet Trading Volumes

According to Cryptoquant data, Bitcoin’s sell-side liquidity has plummeted to just 6.6 months, signaling a drop in available supply on the market. This change is particularly notable as Bitcoin’s Liquidity Inventory Ratio, which stood at 41 months in October, has now shrunk drastically. This trend points to a potential decrease in selling pressure, which could lead to price stabilization in the future. Despite this, the lack of substantial market movement and lower trading volumes suggest that Bitcoin’s price might remain in a consolidating range until the New Year.

Bearish Signs and Diminished US Interest

Technical indicators on the BTC/USD 1-day chart show a bearish outlook, with moving averages signaling weak momentum over short-term time frames. The relative strength index (RSI) is currently at 43, while the Stochastic oscillator sits at 14. Both suggest a neutral to slightly bearish market. The holiday lull has impacted U.S. interest, as indicated by the negative $169.18 premium on Coinbase, a sign that fewer traders are engaging with the asset. In contrast, South Korea’s “Kimchi premium” remains, albeit reduced from 3.38% to 1.3% as of December 25.

Crypto Market in Flux: Winners and Losers

While Bitcoin struggles, other cryptocurrencies have also faced volatility. XRP dropped over 3%, BNB saw a 4.27% decrease, and DOGE fell 2.25%. However, Phala Network (PHA) was a standout performer, gaining 18.26% during the weekend. Interestingly, FTX Token (FTT), tied to the collapsed exchange, saw a surprising 12.77% rise. Overall, the total crypto market valuation is currently $3.27 trillion, down by 1.61% from the previous day.

Looking Ahead: Market Liquidity Could Ease Selling Pressure

As we head into the new year, the decline in liquidity could point to a possible reduction in selling activity, paving the way for a more stable or bullish phase for Bitcoin and other cryptocurrencies. However, with low trading volumes and ongoing seasonal effects, market participants should remain cautious.

For more details, visit the full source.