December turned out to be disappointing for traders. Instead of rising to $100,000 per coin, the market dropped below $50,000. And even the expected target of 55,000 has not yet been achieved. There are eight days left, and only a Christmas miracle can save the cryptocurrency.
That’s just a miracle – a phenomenon that is difficult to predict. And if it happens, it will be good. In the meantime, Bitcoin continues to consolidate in a narrow range.
Earlier, two patterns emerged on the chart: a wedge and a downward trend. Initially, we discussed that if we look at the downward trend, then there is a high probability of a downward reversal. But if we consider the wedge, the price went up from it during the impulse on Tuesday. This means that a rollback to its resistance is possible, and if it is confirmed by a rebound, as well as the mirror level of 47,848.69 as support, then BTCUSD has a chance to return to growth.
In addition, a modest flag was seen on the chart, creating prerequisites for continued growth. What’s next?
In troubled times, we can only rely on technology, since the price includes everything. And most often it is technical analysis that gives clear signals of further movement.
Now look at the four-hour chart. The downward trend resistance line (green dotted line) and the horizontal level 47,848.69 are very nicely confirmed by the pullback as support. Everything is like a textbook! Hope for continued growth to the level of 51,697.58 (green dotted line) remains if Wednesday’s highs are renewed.
Threat: Thin Market!
The fact of consolidation in a narrow range raises concerns that instead of a Christmas rally, the market may see a collapse in Bitcoin.But there are other reasons for this.
The latest Glassnode report shows that holders (long-term coin holders) are now buying up the main cryptocurrency. And they do it three times faster than the miners manage to mine them.
Analysts at the on-chain company claim that Bitcoin has now moved into the accumulation zone. And with a price of $47,000 per bitcoin, the supply level went into negative territory.
Cryptoanalysts note that a decrease in volatility and activity of market participants in such a situation leads to a decrease in the level of liquidity. Hello, “thin market”. Holidays will add fuel to the fire (or rather, risk). This means that a surge in volatility is possible. Will this help bitcoin break up (above $51,000)? Maybe.
At the same time, it is worth keeping in mind the probability of a decline to $42,000 per coin if the holiday atmosphere turns out to be non-holiday for Bitcoin. Indeed, with low liquidity, even a small volume can push the market anywhere.
The material has been provided by InstaForex Company – www.instaforex.com