By the equator of the current trading week, it becomes clear that, despite favorable macroeconomic conditions, the price of Bitcoin is beginning a period of correction.
Market sentiment peaked the previous week when the cryptocurrency approached $45,000, hitting its local high.
More than 75% of investors predict further growth of BTC. However, despite the optimism, the market went in the opposite direction: profit-taking volumes exceeded purchases, and some investors switched to stock market assets.
Bitcoin price lost 6% of market capitalization in three days. A change in market sentiment creates the prerequisites for believing that the positive fundamental background no longer affects the dynamics of the cryptocurrency.
It is important to note that even the inflation data released on December 12 had little impact on Bitcoin. A decrease in inflation in the United States from 3.2% to 3.1%, despite expectations, could have had an impact, but the cryptocurrency reacts poorly to the change in trend.
The general situation on world markets and its impact on the Bitcoin forecast
Meanwhile, amid the collapse of Bitcoin prices to 40 thousand on December 13, miner sales exceeded $44 million. The influx of BTC to crypto exchanges has resumed, and the activity of short-term investors has increased. However, it is possible that the market has already taken into account the expected decisions of the Federal Reserve, which could lead to minimal changes in the price of Bitcoin.
Technical analysis shows the formation of a double top reversal pattern on the 4H chart, which could lead to an intensification of the downward trend. Despite various price movement scenarios, the market will be subject to some volatility.
Meanwhile, in the US, Dow Jones futures rose 0.2% and S&P 500 futures rose 0.25%.. The 10-year US Treasury yield fell to 4.17% The benchmark settled at 4.2%, holding close to its lowest level since early September.
Oil prices rebounded modestly from Tuesday’s losses as West Texas Intermediate crude futures rose 0.5% Wednesday morning.. WTI remained below $69 a barrel, its lowest level since late June.
Buoyed by favorable inflation data, the Nasdaq and S&P 500 rose for the third day in a row on Tuesday.. The S&P 500 rose 0.5% to its highest level since January 2022. The Nasdaq index added 0.7% and reached its highest since April 2022.
European shares and the FTSE 100 index traded higher. France’s CAC 40 index rose slightly in early trading, while Germany’s Dax rose 0.2%. Meanwhile, London’s FTSE 100 index traded 0.2% higher.
Investors across the continent are braced for the latest central bank decisions this week, starting with those from the US Federal Reserve, as well as the Bank of England (BoE) and the European Central Bank (ECB). No rate changes are expected from the Bank of England from the current 5.25%, while the ECB also intends to keep the rate unchanged at the current level of 4.5%.
What will the price of Bitcoin be in the short term?