Bitcoin (BTC) starts the week before Christmas with a whimper as a tight trading range gives BTC bulls little cheer.A weekly close just above $16,700
Bitcoin (BTC) starts the week before Christmas with a whimper as a tight trading range gives BTC bulls little cheer.
A weekly close just above $16,700 means BTC/USD remains without major volatility amid a lack of overall market direction.
Having seen erratic trading behavior around the latest United States macroeconomic data print, the pair has since returned to an all-too-familiar status quo. What could change it?
That is the question on every analyst’s lips as markets limp into Christmas with little to offer.
The reality is tough for the average Bitcoin hodler — BTC is trading below where it was two years and even five years ago. “FUD” is hardly in short supply thanks to FTX fallout and concerns over Binance.
At the same time, there are signs that miners are recovering, while on-chain indicators are signalling that the time is right for a classic macro price bottom.
Will Bitcoin disappoint further into the new year, or will bulls get the Santa rally they so desperately need? Cointelegraph takes a look at the factors behind upcoming BTC price action.
BTC spot price: “Capitulation” or “slow grind?”
Closing out the week at just under $16,750, Bitcoin escaped without a fresh bout of volatility on Dec. 18.
Even that which accompanied U.S. inflation data and Federal Reserve commentary was short lived, and BTC/USD has since returned to an arguably frustrating status quo.
Data from Cointelegraph Markets Pro and TradingView proves the point — since the FTX scandal erupted in early November, Bitcoin has seen hardly any noticeable price movements at all.
For market commentators, the question is thus what it will take for things to take a different turn, up or down.
Eyeing Fibonacci retracement levels on the weekly chart, analytics resource Stockmoney Lizards ventured that BTC/USD was at “key support.”
Should the area around $16,800 begin to disappear, the next one is at around $12,500.
Another chart from the weekend compared what it called “final washouts” for Bitcoin during past bear markets. This reinforced the idea that BTC/USD may be almost done “copying” previous macro bottoming structures.
Others believe that the worst is yet to come for the current cycle. Among them is popular trader and analyst Crypto Tony, who is among those targeting a low potentially around $10,000.
“So in 2023 I am expecting BTC to begin to form a bottoming pattern at the lower boundaries of the range we currently sit in, along with the volume support around $11,000 – $9,000,” he reiterated in a Twitter thread this weekend.
“Whether we capitulate or a slow grind down is to be seen.”
He added that the “accumulation stage” following mass capitulation would only come further on in 2023, as Bitcoin gears up for its next block subsidy halving event.
New U.S. data due as analysis predicts risk asset dive
After last week’s drama courtesy of inflation data and the Fed, it is safe to say that the coming week will provide somewhat less pressure for Bitcoiners.
That said, U.S. third quarter gross domestic product (GDP) growth is due, this estimated to flip positive after Q2 saw a 0.9% retraction.
This is significant, as at the Q2 print, the U.S. technically fell into a recession, despite the best efforts of politicians to deny that the financial picture was as dire as the data implied.
As market investor Ajay Bagga notes, however, an overly strong GDP reversal would give the Fed license to continue aggressive interest rate hikes to tame inflation — something unwelcome for risk assets across the board, including crypto.
“US Atlanta Fed US GDPNow model estimate for real US GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2022 is 3.2 % on December 9, down from 3.4 % on December 6,” he wrote in an update last week.
“Very strong US GDP reading from a mostly accurate estimator. Fed will hike and continue hiking.”
Beyond GDP, the personal consumption expenditures price index (PCE) is also due, a measure which the Fed keenly eyes when taking policy changes into account.
In its latest market update on Dec. 17, trading firm QCP Capital likewise drew attention the PCE impact.
“Thanks to the Fed, whatever we’re trading now, we’re just trading inflation (and wage) prints,” it summarized.
QCP nonetheless had a word of warning for risk asset markets, this coming in the form of a leg down for everyone, crypto included, in the near future.
“As we’ve been writing, this Q4 rally has set up the perfect 4th wave, with a final 5th wave lower incoming for all markets – S&P/Nasdaq, 2yr/10yr, USD and BTC/ETH,” it stated.
Crypto Tony shared that sentiment, predicting what he called an “impulse low” across stocks indices before a bounce back.
“I was looking for a push up to create a double top around 4320, but we failed to get there and dumped…
cointelegraph.com