"There are no prerequisites for growth." What will happen to bitcoin in the coming week
Experts analyzed the market situation and told how it may change in the short term
On December 25, bitcoin is trading at $16.8 thousand, for the past seven days, its price returned to the values of the beginning of the week, and the volatility of the first cryptocurrency was observed only in the short term. Experts have analyzed the market situation and assessed the prospects for the movement of the bitcoin rate in the next seven days.
"It takes time and favorable news."
BitRiver financial analyst
The week from December 19 to 25 in the crypto market turned out to be dull. Bitcoin reacted to a spike in volatility in stock indices and the dollar index. Volatility rose on Tuesday (December 20) and Thursday (December 22). Demand for risky assets remained low as investors fear a U.S. recession due to further rate hikes. US Federal Reserve Chairman Jerome Powell has promised to raise rates even if statistics show a weakening economy. The first wave of bitcoin sales faded at $16,256 and the second at $16,559. As a result, the BTC/USDT pair remained in the $16,500 to $17,000 price range.
There is one week left before the three-month and one-year candle closes. As of this writing, bitcoin's loss to the dollar for Q4 is 13.44% and for 2022 is 63%. The year with three twos has not been good for the cryptocurrency market. The market has been under pressure since the beginning of the year amid a tightening of the US Federal Reserve monetary policy (aggressive rate hikes), the collapse of stock indices, the strengthening of the dollar, the collapse of the Luna project, the loss of confidence due to blocking of clients from Russia and the collapse of the FTX exchange.
January began at $46,216. After falling to $15,476, BTC price stabilized at $16,825. Since November 9, the market has been experiencing a sideways trend, from which an exit is expected in the near future. While the price is below $18,500, the market remains at the mercy of the sellers. They keep their hand on the pulse and wait for the stock indices collapse to move lower to the area of $12,000. Buyers are still reeling from the FTX crash as investor losses run into the billions of dollars. It will take time and favorable news for a new upward move.
On Monday, December 26, the U.S. and European stock markets will be closed. With U.S. stock indices closing on the upside, buyers have an opportunity to get a foothold above $17,000 by Wednesday (December 28). If they don't take advantage of that momentum, you can expect a test of the $16,000-$16,200 zone.
"Market will be driven by emotions and fears."
ENCRY Foundation Co-Founder
There are no prerequisites for the significant growth of bitcoin in the coming weeks. At best, we may observe local bursts and attempts to return at least to the zone of $17,500 - $18,000. Bitcoin's ability to reach those targets depends on whether it manages to consolidate above the overbought zone of $16,700. If it does, bitcoin could move back to $17,000 with a target for the next target of $17,500. For now, however, all indications are that bitcoin will fall back to $16,600 in the coming days, which would open a window for it to move 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 several crypto brokers remains a serious challenge for the crypto industry. This can be compared to the flight of bank deposit holders, which usually leads to banking crises.
Adding to investors' fears are rumors of possible criminal prosecution of the world's largest cryptocurrency exchange, Binance. Articles about Mexican drug cartels and hackers laundering money through it appear with enviable regularity. After FTX collapse, market participants logically expect stricter regulation of crypto exchanges in the US and other regions, so it is understandable that users prefer to withdraw bitcoins and store them in third-party cold cryptocurrency wallets. This does not play in favor of bitcoin's growth either.
All the positive signals that the crypto market received after the Fed's key rate hike have already exhausted their potential and are fully taken into account. Now bitcoin may add a little bit after the publication of the PSE index, the index of personal consumption of households in the United States, which is one of the most important indicators of inflation.
If we talk about the next week, there are not expected any important economic indicators for the crypto market, so the market will be mainly moved by emotions and fears.