Last week, the price of Bitcoin experienced fluctuations between $40,222 and $43,475. The dip to $40,222 was caused by a massive liquidation of $455 million of long positions on December 11 to 12. However, the price stabilized in a narrow range of $40,700 to $42,104 before starting to recover on December 13 after the US Federal Reserve’s decision on interest rates and the weakening dollar. On December 14, despite the dollar’s decline, Bitcoin failed to show significant growth, and trading closed at around $42,900. The week concluded with Bitcoin trading in negative territory on December 15, with the BTC/USD pair correcting by 2.51% to reach $41,940.
The market experienced some pressure due to the release of American statistics and mixed statements from US Federal Reserve officials. While US industrial production improved by 0.2%, indicating a resilient US economy, there were talks of a possible rate cut at the Fed’s March meeting next year.
As of now, the BTC/USD rate is $41,900, and the analysis of external factors and technical data suggests favorable conditions for further growth before the upcoming holidays and New Year. It is expected that the price of Bitcoin may reach $50,000 by the end of the year, supported by seasonal factors. However, the week was characterized by mostly negative dynamics for Bitcoin, despite favorable macroeconomic factors.
Increased volatility and corrections were expected following the growth phase that began in the cryptocurrency market in October. The two-day meeting of the US Federal Reserve Service on the key rate also influenced Bitcoin’s volatility and correction. While the Fed left the key rate unchanged, they hinted at future cuts in 2024 due to slowing inflation in the American economy.
Market participants anticipate the first rate reduction in the spring of 2024, which could lead to capital moving out of Treasuries and into riskier assets like cryptocurrencies. This positive sentiment is further supported by expectations of a Bitcoin ETF approval by the SEC, upcoming Bitcoin halving, and geopolitical tensions. However, last week, short-term holders took profits from the previous growth round, causing a correction in the Bitcoin rate to $42,000.