Bitcoin suffered a decline of around -6% during the second week of December. Let’s see together the future prospects for the BTC price.
Status of Bitcoin (BTC)
Bitcoin reached $42,000 then $45,000 last week. Subsequently, it began a short-term horizontal consolidation phase, which was eventually broken to the downside. Indeed, on the night of December 11, the price of Bitcoin underwent a downward movement, bringing it quickly towards $40,300. This latest level sparked buying interest, bringing BTC back above the $42,000 threshold. However, this interest was unfortunately not sustained. Thus, the price continued its decline towards $40,000. The short-term structure is now being called into question; nevertheless, the underlying trend still remains bullish.
This morning, the price of BTC is trading around $41,800. It has not crossed the psychological threshold of $40,000. Likewise, it remains above its 50-day and 200-day moving averages, reinforcing the idea that Bitcoin is still in a medium-term uptrend. As for the oscillators, we observe that they remain above the median threshold. However, a daily divergence is being confirmed, particularly on the RSI, which suggests a bearish period to come.
The current technical analysis was carried out in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today trainer at Family Tradinga community of thousands of own-account traders active since 2017. You will find Lives, educational content and mutual assistance around the financial markets in a professional and warm atmosphere.
Focus on derivatives (BTCUSDT)
The BTCUSDT open interest has been revised downwards, as has its price. It decreased by more than 10%. This represents nearly $1 billion in unwound positions. Of these, around $120 million of long positions were forcibly closed, according to data platform Coinglass. Thus, all of these elements demonstrate a reduction in traders’ engagement in the market, thus suggesting an opportunity to reevaluate one’s strategy.
The BTCUSD liquidation heat map highlights two areas where a large number of orders are concentrated. Above the current price, the $44,400 area is notable. Below that, the $37,900 area is also worth highlighting. As the market approaches these levels, it could trigger a large number of orders and therefore increase the volatility of the cryptocurrency. These areas are therefore potentially attractive for investors.
Hypotheses for the price of Bitcoin (BTC)
If the price of Bitcoin manages to stay above $40,000, we could anticipate a re-entry of the threshold of $42,000. The next resistance to consider, if the bullish movement continues, would be $45,000. At this stage, this would represent an increase close to + 9%.
If the price of Bitcoin fails to stay above $40,000, we could envisage a return to $39,000. The next level to take into account, if the bearish movement continues, would be around $38,000. At this stage, this would represent a drop close to – 7%.
Conclusion
Bitcoin has been on the rise, marking new and increasingly higher annual highs. However, the $45,000 threshold caused short interest and, as a result, the BTC price suffered a decline. For the moment, it is still too early to say that the overall trend is in question. However, the continuation of this downward movement could become worrying. It is therefore crucial to carefully observe the price reaction at different key levels to confirm or refute the current assumptions. We must also remain vigilant in the face of potential “fake out” and market “squeeze” in each scenario. Finally, let us remember that these analyzes are based solely on technical criteria. The price of cryptocurrencies is also likely to change rapidly depending on other, more fundamental factors.
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
