BTC Price Back to $94K? 5 Things to Know This Week

Bitcoin (BTC) has for the first time reached a weekly closing level above 100,000 USD, kicking off a new trading week with volatility.

• The weekly closing record did not last long, as analysis warned that the market needs to fill a 10,000 USD bearish candle wick from the previous week.
• CPI week is starting, and the US Federal Reserve has less than ten days left to make their rate decision.
• China announced its first easing policy move in nearly fifteen years, starting from 2025.
• Microsoft is expected to vote on creating a Bitcoin fund, which could be a big week for corporate Bitcoin adoption.
• BTC price analysis sees a "volatile up-and-down" short-term market state, with the next stop at 110,000 USD.

BTC Price Drops: "Sooner Rather Than Later?"

Bitcoin witnessed a last-minute surge on December 8, allowing it to reach a new record weekly close above 100,000 USD.

The first-ever six-digit close did not last, as BTC/USD dropped below 99,000 USD and declined 2.8% on the day at the time of writing, according to data from TinTucBitcoin and TradingView.

"Still couldn't sustain above 101K USD," prominent trader Skew summarized in his latest market analysis on X.

Skew explained that a combination of nearby resistance factors had prevented the bulls from pushing prices further.

"Looking for strength and demand from here to lift the market higher / confirm the 98K USD area as support. If not, continue to weaken, be patient and wait a bit," he concluded.

Fellow trader CrypNuevo took a more cautious tone. He argued that Bitcoin needs to fill in half of the massive daily candle wick down to 92,000 USD formed in a liquidation event on December 5.

CrypNuevo added that there is a 96% chance that the wick will be filled, calling it an "imbalance" that will weigh on the market for the time being.

"Can price rally from here (explode) without filling the 50% wick at 94K USD?" he wrote in a part of his latest X stream.

"Yes, but I DO NOT believe in that move because there is still a large downside imbalance that needs to be filled as soon as possible."

CPI Ahead as Markets Await More Fed Rate Cuts

The Consumer Price Index (CPI) for November marks the highlight of the US macroeconomic calendar this week.

With less than ten days to the Fed's rate decision, markets are increasingly betting on a continuation of policy easing.

The latest data from the CME Group's FedWatch Tool indicates an 85% chance of a 0.25% rate cut being implemented after the Fed's December 18 meeting.

Officials continue to face a dilemma — rising unemployment and rising inflation — creating an environment dubbed "stagflation."

"All eyes on CPI and PPI data as the market hopes to cement another 25 basis point cut," trading resource The Kobeissi Letter summarized, also mentioning the upcoming Producer Price Index (PPI) release.

Numerous unemployment data will accompany PPI, with the crypto markets particularly sensitive to this information in 2024.

"The average duration of unemployment in the US rose to 10.5 weeks in November, the longest in 3 years. At the same time, the average duration of unemployment rose to 23.7 weeks, the highest since April 2022," Kobeissi noted over the weekend.

"Both of these metrics are now rising at a pace last seen at the onset of the previous 4 recessions."

China Begins Rare Fiscal Easing

A classic macroeconomic boost for Bitcoin could come from China as early as 2025.

China has announced plans to ease fiscal policy next year — the first change since 2010 and a move seen as highly symbolic by risk asset traders.

As quoted by the media, including Reuters, on December 9, Beijing sees the need to ensure that the policy will be "appropriately loosened" in the future.

The potential liquidity flow, which may be the result of this change, is likely to be clearly felt by the cryptocurrency market. Earlier this year, China's fiscal stimulus measures have had an immediate impact on the BTC price momentum.

Analyzing the ten-year bond yield, Dan Tapiero, founder and CEO of 10T Holdings, argued that they represent "the most important macro chart in the world that is not being paid attention to."

"Negative real interest rates in China are reducing US inflation concerns. A stronger USD, lower rates, Nasdaq up. +Liquidity," a specialized post on X said over the weekend.

However, for investment research firm HFI Research, it is the specific bonds that will benefit from any positive liquidity changes.

"China is about to find out that they are following a similar path to Japan," they told their X followers last week.

"The more monetary support, the more money flows into bonds instead of risky assets. Why? Because people doubt that fiscal stimulus will be effective."

Microsoft Decides on Bitcoin Strategy

Institutional Bitcoin adoption could make headlines in the coming days as tech giant Microsoft votes on whether to add BTC to its balance sheet.

After a pitch by Michael Saylor, CEO of business intelligence firm MicroStrategy, to their board, Microsoft now faces the decision of whether to replicate his Bitcoin treasury.

On December 1, Saylor shared the presentations from his pitch, calling BTC "the highest performing uncorrelated asset a corporation can hold on its balance sheet."

"Microsoft should be driven by Digital Capital," one topic stated.

There are also rumors surrounding tech giant Amazon that they are considering a Bitcoin treasury after a proposal to their board by the National Center for Public Policy Research, a US think tank.

As TinTucBitcoin reported, the proposal had criticized the CPI, expected to be released this week, calling it an "extremely poor inflation measurement tool."

"Is Amazon buying Bitcoin?" Charles Edwards, founder of the Bitcoin and digital asset fund Capriole Investments, asked in one of the speculative reactions to the news on X.

Last week, previous research suggested that MicroStrategy could survive without serious consequences to its balance sheet even if BTC dropped 80% in value.

A Challenging New Year Ahead?

Despite reaching new highs, BTC may have to face an extended consolidation period and increasingly difficult resistance levels.

This is according to analysis from CryptoQuant, which sees "volatility" characteristic of BTC price behavior in the short term.

"The 14-day Complexity Index is in the first zone indicating corrective moves during consolidation," contributing analyst Percival reported in one of their Quicktake blog posts.

The Complexity Index is not exclusive to BTC, but on the daily timeframe, it shows that the ability to break out of the current trading range on BTC/USD is increasingly unlikely.

The 15-week high means the pair is currently "lower" than at any time since mid-August.

Percival pointed to two notable price levels in the battle against volatility: $110,000 and $120,000, both of which correspond to profit levels for BTC investors.

To do so, he used the realized price of Short-Term Holders (STHs) — entities holding a certain amount of BTC for 155 days or less.

The psychological appeal of the $120,000 level, he explained, makes that level a "deeper consolidation zone" going forward.

Compiled by Bitcoin News