Experts analyzed the market situation and told how it could change in the short term
On December 25, bitcoin was trading at $ 16.8 thousand, over the past seven days its price has returned to the values of the beginning of the week, and the volatility of the rate of the first cryptocurrency was observed only in the short term. Experts analyzed the situation on the market and assessed the prospects for the movement of the bitcoin exchange rate for the next seven days.
“It takes time and favorable news”
The week from December 19 to December 25 on the crypto market turned out to be boring. Bitcoin reacted to the surge in volatility in stock indices and the dollar index. Volatility increased on Tuesday (December 20) and Thursday (December 22). Demand for risky assets remained low as investors feared a recession in the US due to further rate hikes. The head of the US Federal Reserve Jerome Powell promised to raise rates, even if statistics show a weakening economy. The first wave of bitcoin sales faded at $16,256, the second — at $16,559. As a result, the BTC/USDT pair remained in the price range of $16,500 – $17,000.
There is a week left before the closing of the three-month and annual candles. At the time of writing the review, bitcoin’s losses to the dollar for the 4th quarter are 13.44%, for 2022 — 63%. The year with three twos was not a success for the cryptocurrency market. The market has been under pressure since the beginning of the year amid the tightening of the monetary policy of the US Federal Reserve (aggressive rate hikes), the collapse of stock indices, the strengthening of the dollar, the collapse of the Luna project, loss of confidence due to the blocking of clients from Russia and the collapse of the FTX exchange.
January started at $46,216. After falling to $15,476, the BTC price stabilized at $16,825. Since November 9, there has been a sideways trend in the market, from which an exit is expected in the near future. As long as the price is below $18,500, the market remains at the mercy of sellers. They keep their fingers on the pulse and wait for the stock indices to collapse in order to move lower to the $12,000 area. Buyers are still reeling from the collapse of the FTX, as investors’ losses amount to billions of dollars. It takes time and favorable news for a new upward movement.
On Monday, December 26, exchanges in the United States and Europe will be closed. As US stock indexes closed in the black, buyers have the opportunity to gain a foothold above $17,000 by Wednesday (December 28). If they don’t take advantage of this moment, we can expect a test of the $16,000-$16,200 zone.
“Emotions and fears will move the market”
There are no prerequisites for a significant growth of bitcoin in the coming weeks. At best, we can observe local spikes and attempts to return at least to the $17,500 – $18,000 zone. Bitcoin’s ability to achieve these goals depends on whether it manages to gain a foothold above the overbought zone of $16,700. If this happens, bitcoin could return to $17,000 with an eye on the next target — $17,500. However, so far everything indicates rather that bitcoin will fall again to $16,600 in the coming days, which will open a window for going even further down to $16,300.
The liquidity problem remains very acute: the massive outflow of bitcoins from centralized crypto exchanges after the collapse of FTX and the bankruptcy of a number of crypto brokers remains a serious challenge for the crypto industry. This can be compared to the flight of deposit holders in banks, which usually leads to banking crises.
Investors’ fear is also aggravated by rumors about possible criminal prosecution of the world’s largest crypto exchange Binance. Articles that money is laundered through it, either by Mexican drug cartels or hackers, appear with enviable regularity. After the collapse of FTX, market participants logically expect stricter regulation of crypto exchanges in the United States and other regions, so the actions of users who prefer to withdraw bitcoins and store them on third-party cold crypto wallets are quite understandable. This also does not play in favor of bitcoin’s growth.
All the positive signals that the crypto market received after the Fed’s key rate increase have already exhausted their potential and are fully taken into account. Now bitcoin may add a little after the publication of the PSE index, the index of personal household consumption in the United States, which is one of the most important indicators of inflation.
If we talk about the next week, then there is no expected publication of important economic indicators for the crypto market, so the market will be driven mainly by emotions and fears.
