The period of illiquidity that characterizes the holiday season has been reflected in the significant decline in daily Bitcoin payments, which have reached a yearly low. According to data from blockchain.com, confirmed Bitcoin payments sank to 623,434 on December 26, marking the lowest point of the year.
Understanding Confirmed Bitcoin Payments
Confirmed Bitcoin payments refer to transactions that have been accepted and included in a block by the blockchain network’s consensus mechanism, making them irreversible. Metrics such as the number of confirmed payments can be used to gauge investor activity on the Bitcoin network.
Bitcoin Price Crosses $108,000 All-Time High
On December 17, the Bitcoin price crossed the $108,000 all-time high, securing over 857,000 confirmed payments, which is 37% more than yesterday’s 623,000. This surge in transactions suggests a significant increase in investor activity on the network.
Confirmed Bitcoin Payments and BTC Price
The following chart illustrates the relationship between confirmed Bitcoin payments and the price of Bitcoin over the past year:
Bitcoin Analysts Expect Imminent Price Recovery
Despite the decline in daily Bitcoin payments, analysts are expecting an imminent price recovery above $105,000 entering the end of the holiday period. This expectation is based on the fact that the holiday season often associates with low institutional liquidity.
Weak Bitcoin Social Sentiment Points to Imminent Price Recovery
The social sentiment around Bitcoin has also pointed to an imminent price recovery. According to Cointelegraph, social sentiment around Bitcoin fell to its lowest level of 2024, with an average ratio of four to five positive versus negative Bitcoin-related comments.
Contrarian Perspective on Weak Social Sentiment
However, this low retail investor sentiment could be a sign of a forthcoming Bitcoin breakout. Market intelligence platform Santiment wrote in a December 22 X post:
‘Vocal traders are now showing severe FUD (fear, uncertainty, and doubt), and that’s good news for contrarians who know markets move in the opposite direction of retail’s expectations.’
Other Crypto Analysts Expect End to Correction Under $100,000
Other crypto analysts also expect an end to Bitcoin’s correction under $100,000. On December 20, Bitcoin’s daily chart produced three consecutive red candles for the first time since the first week of November, which coincidentally was the lead-up period to Donald Trump’s US presidential election victory.
Post-Christmas Market Activity and Expected Trading Range
Bitcoin’s current downtrend is an organic symptom of the holiday illiquidity. Ryan Lee, chief analyst at Bitget Research, told Cointelegraph:
‘Post-Christmas, market activity typically picks up again, with funds expected to actively position for sectors that might benefit from Trump’s upcoming inauguration… The expected trading range for BTC this week is $94,000 – $105,000.’
President-elect Donald Trump’s Inauguration as Next Significant Catalyst
President-elect Donald Trump’s inauguration on January 20, 2025, could be the next significant Bitcoin catalyst.
Conclusion
The decline in daily Bitcoin payments during the holiday season reflects the period of illiquidity that characterizes this time of year. However, analysts are expecting an imminent price recovery above $105,000 entering the end of the holiday period. The weak social sentiment around Bitcoin could be a sign of a forthcoming Bitcoin breakout, and other crypto analysts expect an end to Bitcoin’s correction under $100,000.
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