Like gold, bitcoin fell lower around the Fed’s last meeting, which is a normal reaction as the outlook for monetary policy becomes less subdued. Bitcoin is arguably slightly less vulnerable than gold to higher prices, as there are several avenues for holders of transferable bitcoins, especially now that many coins are at or near all-time highs. Crypto market participants view the likely policies of the incoming Republican administration positively.
Bitcoin’s momentum was lower in December, which makes sense as the price approached the critical and long-awaited $100,000 area. Volume has also declined somewhat from the peak around the middle of last month and there is no longer as strong an overbought signal as there was during most of November. The final retracement of the 100% weekly Fibonacci extension was also expected, as this has been the stretch target since the middle of last month.
Given the current strong sentiment, a move back below $90,000 seems unfavorable in the near future, but $100,000 could remain a key battleground. Now that the uptrend has clearly matured and participants appear inclined to buy faster during even relatively modest retracements, a retest of $108,000 seems likely in the next few weeks. However, traders should prepare for higher volatility during the upcoming holiday season.
This article was submitted by Michael Stark, an analyst at ExnessExness.
The opinions expressed in this article are personal to the writer. They do not reflect those of Exness or FX Empire.