Bitcoin (BTC) fluctuated around the level of 102 thousand USD on December 19 when Wall Street opened, in the context of the sentiment about cryptocurrencies gradually recovering after a new macroeconomic shock.
BTC/USD chart in 1 hour. Source: TinTucBitcoin/TradingView
Fed stops the upward trend of the Bitcoin market
Data from TinTucBitcoin and TradingView shows that the BTC price increased by 2% compared to the opening level of the day.
Bitcoin has participated in the sell-off of risky assets and cryptocurrencies caused by the US Federal Reserve a day earlier, in which BTC/USD touched a Dip of 98,695 USD on the Bitstamp exchange.
The shock came from Fed Chairman Jerome Powell, who expressed hesitation about future interest rate cuts as various inflation indicators showed signs of recovery.
"With today's action, we have now raised our policy interest rate by a full percentage point from its peak, and our policy stance is now considerably less restrictive," he said in a prepared statement at the post-meeting press conference after the 0.25% standard interest rate cut.
"So we can be more cautious as we consider further adjustments to our policy interest rate."
Both the S&P 500 and Nasdaq 100 ended the trading session of the day with a Dump of around 3% due to this impact.
However, the latest estimates from the CME Group's FedWatch Tool show that the probability of another interest rate cut at the Fed's next meeting in January is only 8.6%.
Probability of target interest rate. Source: CME Group
When analyzing the short-term price movements of BTC, the famous trader Skew remains quite optimistic about the recovery of Bitcoin.
"So far there is no reversal trend even after having swept last week's lows and market demand," he wrote in a post on X about the 4-hour chart.
"Hoping to see price hold above VAH here and passive demand maintain below price to recover/rally higher."
BTC/USDT 4-hour chart. Source: Skew/X
Skew pointed out that the value area high, or VAH, makes the area above 101,500 USD important to hold.
Risk of BTC price Dump in January
Others recommend a long-term view during the high volatility period, with Bitcoin still up 6% in December.
"The price action of $BTC is Fluctuating and not looking too pretty. But, it is still Slowly Climbing," fellow trader Daan Crypto Trades continued in a post on X.
Daan Crypto Trades acknowledged the psychological release impact of mass liquidations along with the market downturn. Data from the monitoring source CoinGlass shows that the total amount of cryptocurrency liquidated in the 24 hours up to the time of writing was 800 million USD.
"Back in 2021, Wednesdays were often the days we saw a lot of liquidations," he added about the market behavior during the previous Bitcoin bull market.
"It almost became a trend at some point. Just up -> Mid-week Liquidations -> Retreat. It would be very interesting if that repeated."
Cryptocurrency liquidations (screenshot). Source: CoinGlass
More pessimistic forecasts still come from those concerned about macroeconomic consequences. Trader and analyst Mark Cullen warned of a "larger Bitcoin price Dump" that could still come.
"BTC is still holding 100K this is key to see another push before the larger correction occurs," he warned his Watchers on X, predicting this scenario could happen in January.
BTC/USD chart. Source: Mark Cullen/X
