Bitcoin price retreats as hopes of a Santa Claus rally fade

[ad_1]

Bitcoin price has been moving sideways over the past few weeks.

The Federal Reserve appeared more hawkish than expected.

It formed a rising wedge pattern.

Bitcoin price continued to decline on Monday as investors remained concerned about monetary policy and the crypto industry. The BTC coin was trading at $16,750, where it had been for the past few days. This price is a few points lower from last week’s high of $16,867.

No Santa Gathering?

The BTC/USD price has continued to consolidate over the past few weeks. After making a comeback last week, the pair suffered a pullback as investors pondered the Federal Reserve’s latest interest rate decision.

In its decision last week, the Fed decided to raise interest rates by 0.50% in its final decision of the year. It had previously hiked rates by 75 basis points in the four previous monetary policy meetings. In addition, the bank has decided to continue its quantitative tightening policy, as we have written here.

The most significant change was that the Fed would continue to raise rates in the coming months. This statement helped the market change its mind on monetary policy. Prior to the meeting, analysts had expected the central bank to appear a little dovish as inflation began to subside.

After the decision, US and global stocks tumbled as bond yields hit their highest level in weeks. The US dollar index, which was falling recently, has rallied strongly in recent days.

The other main reason why the price of Bitcoin has pulled back is the increase in outflows from most exchanges. Binance, the largest exchange in the world, has seen its outflows soar to over $7.5 billion in the past 7 days. During the same period, Bitfinex saw over $335 million in outflows while Crypto.com lost over $76 million.

Therefore, all these actions mean that the Santa Claus rally did not happen. A Santa Rally is a situation where stocks rally before the market opens.

Bitcoin Price Prediction

BTC/USD chart by TradingView

So, is it safe to buy Bitcoin? The price of BTC has been in a tight range for the past few days. During this period, it remained below the important resistance level at $16,867. It is also consolidating at the 25-day and 50-day moving averages.

At the same time, the Relative Strength Index (RSI) has formed a bullish divergence pattern, which is a bullish sign. It has also formed a rising wedge, which is usually a bearish sign. Therefore, the coin is likely to have a bearish breakout. If that happens, it could drop to $15,000.

Share this articleCategoriesTags

[ad_2]