2021-12-24 06:21 |
The Bitcoin (BTC/USD) price has been in a tight range in the past few months. The coin has found substantial support at about $45,000. It has also resisted moving above the psychological level of $50,000. Other leading cryptocurrencies like Ethereum and Litecoin have had the same price action.
Why is BTC waveringThere are two main reasons why the Bitcoin price is in a consolidation mode. First, investors are still reflecting on the recent interest rate decision by the Federal Reserve.
In its most recent decision, the bank decided to leave interest rates unchanged between 0% and 0.25%. It also hinted that it will have three rate hikes in 2022. As part of the great unwinding, the bank said that it will double the size of its asset tapering.
Therefore, investors are still assessing what a tighter monetary policy means for risky assets like Bitcoin and other cryptocurrencies. In my view, these worries are overblown.
For one, the Fed tightening will be relatively gradual as we experienced in the past few years. If it implements its guidance, the bank will raise rates to about 0.75% in 2022. That’s still low historically speaking.
Second, the Bitcoin price is in a tight range as investors take profit after its relatively successful year. Historically, Bitcoin tends to be a bit volatile in December. This trend could also be because of tax-loss harvesting.
This is a situation where investors sell loss-making assets and then account for these losses in their tax returns. What’s interesting is that cryptocurrencies are not subject to the Wash Sale rule, meaning that you can sell them and then buy back.
Still, a bull case for the Bitcoin price can be made. For one, big BTC holders like Tesla, MicroStrategy, and Michael Saylor are not selling. Also, on-chain data shows that the number of transactions in the network are rising.
Bitcoin price predictionA quick look at the four-hour chart shows that a dangerous pattern has emerged. As you can see, the Bitcoin price has found substantial support at about $45,000 level. This is a similar pattern that happened in July when it struggled to move below $30,000. But now, the coin has formed a descending triangle pattern that is usually a bearish sign.
Therefore, a break below $45,000 will signal that bears have prevailed, meaning that they could drag the coin below $40,000. A move above the upper side of the triangle will signal that the descending triangle has been invalidated.
The post Bitcoin price prediction: A dangerous pattern forms appeared first on Invezz.
Similar to Notcoin - Blum - Airdrops In 2024
Bitcoin (BTC) на Currencies.ru
|
