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We mentioned earlier that many charts show Bitcoin price increases soon. As the last days have passed, these data are consolidating and there is more and more evidence of an imminent bullish sentiment in the market. However, now the flagship asset cannot overcome the resistance level of $ 50,000. At the moment, the BTC rate is hovering around the $ 48,760 mark with a market capitalization of $ 921,564,443,336.
A new week has started for Bitcoin, all in the same price range. The coin tried to break the $ 50,000 mark, but to no avail. The current market situation makes many traders and investors wonder what the close at the end of 2021 will be like. Also, analysts are trying to predict the development of events with short-term price action. Although there are only two weeks left until the end of the year, many believe Bitcoin has close potential for price gains. However, others believe that the indicators will not turn green as they did in previous years.
Overcoming the resistance level in $50 000
Technical analysis platform TradingView shows that on Sunday Bitcoin was desperately trying to break the $ 50,000 resistance level. But in the end, the asset was unable to hold its positions, and attempts ended in rejection.
A source: TradingView
Industry experts note that nothing surprising happened. The course followed the expected trajectory. At the same time, the market capitalization of the largest cryptocurrency remains below $ 1 trillion at $ 921,564,443,336. Twitter user @ TechDev_52 refers in his chart to the fact that last year the indicators were similar, and then BTC rushed up.
The creator of the famous Bitcoin Stock-to-Flow (S2F) model PlanB also shared an updated forecast. He admitted that his prediction did not materialize last month as Bitcoin (BTC) prices fell below the $ 60K zone after the recent $ 69K ATH. However, PlanB emphasizes that the S2F model has not been harmed and is indeed approaching $ 100K. He remains optimistic and notes that BTC has been in an extended consolidation phase for most of the year.
At the moment, the US Federal Reserve System (FRS) will create additional problems for the exchange rate of Bitcoin and other digital assets. It will soon announce the status of its asset purchase program. The FOMC meeting could provide valuable insight into the future of quantitative easing (QE) and the speed of phasing out asset purchases. The meeting will be significantly influenced by the spread of COVID-19, as well as the conditions of inflation. Official CPI data last week showed the highest inflation rate in the US since 1982. Analysts believe that this could greatly affect the cryptocurrency and digital asset market.
ING Statement of Action FRS
Banking giant Internationale Nederlanden Groep (ING) has released a note suggesting what to expect from the FRS meeting in December. The company notes that the economy is growing rapidly and inflationary pressures continue to rise. According to ING, FRS is aware of the risks and is set to announce that the QE program will end in February. Federal Reserve System The US announced that asset purchases will be cut by $ 15 billion in November and another $ 15 billion in December, meaning that if the cut continues at the same rate, QE asset purchases will end by the end of May. However, they also said they could adjust the speed in the new year if warranted by changes in the economic outlook. Now FRS Governing Board member Jerome Powell has made it clear that, in his opinion, a faster “normalization” of policy is already required, as the consumer price index is approaching 7%.
As a result of the completion of the program, FRS will have $ 8.8 trillion in assets on its balance sheet. That’s double the January 2020 level before the pandemic.
Balance sheet assets of the Federal Reserve System (FRS)
This will then pave the way for earlier and faster interest rate hikes, with permission from Omicron, with the FRS dot chart set at least two steps in 2022:
“The FRS stance on the outlook for monetary policy has changed dramatically over the past nine months. As recently as March, a dot plot of forecasts by individual FOMC members showed that interest rates were unlikely to rise until 2024. The June update pushed that back to 2023, and then in September, the average expectation was for the move to 2022. A message from the FRS next week should show they are moving to a two-fold forecast for next year.
In our economic outlook for 2022, we assumed that if it weren’t for the emergence of the COVID-19 Omicron variant, we would have moved from a two-tier boost to a three-tier forecast for 2022. He predicts real growth at 4.4% and inflation at 4.5%, which few say is consistent with keeping interest rates close to zero. So far, the data suggests that Omicron will not interfere with the global recovery, but there is still uncertainty. “
Is Bitcoin Ready to Rise?
All of these events can have a negative impact on the cryptocurrency and digital asset market. Bitcoin may drop in value again. However, analyst Cole Garner remains optimistic about the coin’s value. On his Twitter profile, he posted several charts, and also noted that BTC is ready for a bullish rally and, probably, we will see green indicators in the market.
It is also a good sign for Bitcoin that exchange-traded funds (ETFs) are increasing their holdings of coins. For example, the Purpose Bitcoin ETF, Canada’s first licensed spot ETF, increased its reserves by 17.6% in December, or 4,342 BTC. Thus, the total number of the fund’s coins is 28,974 BTC. Also, other industry representatives and some lawmakers are pressured by regulators to explain their position regarding the cryptocurrency industry. BitFury CEO Brian Brooks told the Senate Financial Services Committee last week:
“Can anyone explain why Fidelity Investments, one of America’s most prominent investment advisors, had to travel to Canada to offer ETFs? Or why are physically settled cryptocurrency ETFs safe and legal in Germany, Brazil, Singapore and elsewhere? But not in the USA? “
Also, the index of greed and fear (Fear and Greed index). It is a market indicator that reflects the sentiment of buyers and sellers. The index shows market trends based on various sources, and gives a definition of what mood market participants are currently experiencing.
Fear and Greed Index. A source Alternative.me
The current indicators are again at the center of discussion due to the new fall in the Bitcoin exchange rate. It hit its lowest level since July last week – 16/100 or “extreme fear”. It then nearly doubled to 28/100 in one day, and then dropped back to 16. It hovered at 27 over the weekend. BTC has been in the range of around $ 40,000 over that period.
Author: Alexander Orlov, analyst at Freedman Сlub Crypto News
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