Bitcoin moved closer to the $17,000 level on Tuesday. The digital currency dropped to $16,400, its lowest level in the last three weeks. As year-end approaches, BTC could face high volatility and low liquidity. Bitcoin Hit A Brief Surge Bitcoin surged to a short-lived peak of $16,837 in today’s session, barely 24 hours after hitting $16,398. The cryptocurrency saw an impulsive decline after experiencing significant rejection at the resistance level. The sharp fall has been associated with a straight daily decline for the S&P 500 and general nervousness about the Federal Reserve’s potential to hike interest rates. BTC/USD trades at $16,870 on the daily chart. Source: TradingView BTC could witness more decline as the year closes given the decline in trading volume and liquidity. This would lead to a spike in the volatility of the asset. Katie Stockton, the founder of Fairlead Strategies LLC, has predicted that BTC could retest November lows, dropping “near $15,600, in the coming weeks.” BTC hit an all-time high of $68,997 on Nov. 8, 2021. But the big crypto produced a major shift in market structure by producing a lower low on the weekly timeframe at $32,995 on January 24. This move confirmed the start of a bear market. Related Reading: Bitcoin Poised To Resume Its Inclination To Outperform, Says Bloomberg Senior Analyst Possible Rally For BTC While the dust settles from the FTX crash and FUD surrounding Binance, the bitcoin price could begin to see a gradual recovery over the next few months. According to Jim Wyckoff, “Neither the bulls nor the bears have any near-term technical advantage.” This suggests that traders will continue to see “more choppy and sideways trading on the daily chart into the end of the year – barring any major fundamental shock to the marketplace,” Wyckoff concluded. However, a tweet by Crypto Trader, PlanB shows that the next Bitcoin halving is set to take place in 15 months. The build-up in price will not happen for at least 5 months as the U.S. FED will continue to tighten up monetary policy. BTC price will have room to breathe as macroeconomic conditions soften. Schroders, a global asset management firm, made the case that risky assets like Bitcoin have a nearly 80% chance of closing the year with positive returns. Related Reading: Bitcoin Still “Overvalued” According To NVT Ratio The investment firm noted that December was the best-performing month after collecting data on U.S. large-cap stocks since 1926. Schroders estimates that there is a 77.9% likelihood that large-cap stocks will end December with a net gain. The company divides all percentage gains vs. all percentage losses over the course of a month to arrive at these metrics. Investors should keep in mind that this year, the correlation between Bitcoin and the stock market has been over 90%. It may be argued that until the end of the year, the peer-to-peer digital currency will continue to reflect price changes on the stock market. Bitcoin is down 2% from December’s opening price of $17,167. Thus, following Schroders’ analysis, Bitcoin may rise by 3.5% to reach $17,550 by Jan. 1, 2023. Featured image from Unsplash.com, charts from TradingView.com
What Happened In Crypto This Week?
