Bitcoin Hits $108K All-Time High Before Flash Correction: Analysts Warn of Potential Pullback

Bitcoin Hits $108K All-Time High Before Flash Correction: Analysts Warn of Potential Pullback

Bitcoin (BTC) experienced a momentary surge to a new all-time high of $108,000 on December 17, only for the price to quickly reverse, erasing most of the gains in a matter of minutes. The flash volatility came shortly after the opening of Wall Street, highlighting the continued market fluctuations Bitcoin has been navigating in recent weeks.


Despite the brief rally, the price quickly dipped by over $2,000, sending BTC back down to around $106,000, near its daily open. This sharp retracement raised concerns about the stability of Bitcoin’s upward momentum, with some analysts warning that the market could be due for a deeper correction.


Market Volatility and Whale Activity

Data from Markets Pro and TradingView confirmed the rapid rise and fall in Bitcoin’s price. However, as the asset retraced, on-chain data provided some insight into potential support levels. According to the on-chain analytics platform Whalemap, large-volume holders have been accumulating BTC around the $98,133 mark.


“More than 150,000 BTC have been accumulated by whales at this level, which could serve as support during future downturns,” Whalemap noted in a post on X, referencing its proprietary whale accumulation tool. This level could act as a safety net for Bitcoin, should the price continue to face downward pressure.


The correction also affected Bitcoin’s open interest (OI), which had previously reached record highs above $70 billion. According to data from CoinGlass, approximately $1.3 billion in open interest was wiped out during the downturn, further underscoring the volatility surrounding Bitcoin’s price action.


Bearish Sentiment in the Options Market

Despite Bitcoin’s new all-time highs, there are cautionary signals coming from the options market. Trading firm QCP Capital pointed out that while Bitcoin's spot price continues to make new records, there is a persistent skew toward put options over call options, indicating that traders may be hedging against further price declines rather than aggressively chasing the rally.


“It’s becoming increasingly difficult to find reasons to be bearish on Bitcoin’s spot price,” QCP Capital commented. “However, the options market suggests caution, with a preference for hedging rather than outright bullish positioning.”


Long-Term Outlook: Pullbacks as Part of Healthy Price Discovery

While many traders had expected Bitcoin’s price to continue its upward trajectory toward $120,000, some analysts, including popular trader Josh Rager, remained unfazed by the recent pullback. Rager reassured his followers that pullbacks are a natural part of the market’s growth cycle.


“Stop freaking out about every pullback for the entire crypto market,” Rager posted on X. “It’s healthy. Everything should be higher over the next 3 to 6 months. The period from now until summer 2025 should be the time to be exposed.”


Rager’s comments reflect the broader sentiment that while short-term price fluctuations can be unsettling, they are not necessarily indicative of a larger downturn.


Historical Precedents: Bitcoin’s Pullback Could Erase Weeks of Gains

On the other hand, trader and analyst Rekt Capital warned that Bitcoin might be due for a deeper correction, citing historical trends. According to Rekt Capital, Bitcoin’s price action during its current “price discovery” phase mirrors previous cycles where significant pullbacks occurred after reaching new all-time highs.


“This is Week 7 of price discovery for Bitcoin,” Rekt Capital noted. “In 2013, Bitcoin pulled back during Week 7. In 2017, it retraced 34% in Week 8. In 2021, it dropped 16% in Week 6.”

Rekt Capital emphasized that the timing of the pullback is less important than being prepared for its potential impact. “When it happens, it will likely wipe out multiple weeks of upside in a single move,” he cautioned.


Conclusion: Volatility Ahead

Bitcoin’s recent price action demonstrates the inherent volatility of the cryptocurrency market. While the asset achieved a new all-time high, the subsequent retracement has left analysts divided between those expecting further gains and those preparing for a deeper correction.


As Bitcoin continues to navigate its price discovery phase, traders are advised to stay cautious, as the historical pattern suggests that significant pullbacks may be in store. The coming weeks could be crucial in determining whether the current rally is sustainable or if a deeper correction is imminent

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