As someone who has been closely following the cryptocurrency market for several years now, I find myself awestruck by the current state of affairs. The recent surge in Bitcoin price and the growing interest in it is truly reminiscent of the dot-com boom I witnessed in the late 90s.
As we approach Christmas week, Bitcoin (BTC) soars to unprecedented peaks, accompanied by lofty predictions for its value.
- A classic “big week” for Bitcoin and crypto is forecast as price discovery returns in time for the start of the TradFi trading week.
- BTC price targets include $140,000 and higher for the coming weeks and months.
- The Fed is tipped to enact a 0.25% interest rate cut in a potential fresh supportive move for crypto and risk assets.
- US President-Elect Donald Trump appears as determined as ever to make a strategic Bitcoin reserve a reality.
- Bitcoin open interest hits fresh all-time highs, but funding rates stay manageable.
Bitcoin traders braced for volatile week
As the new week commences, Bitcoin is causing a stir everywhere due to its record-breaking highs. These impressive heights have been achieved not just by individual investors, but also by traditional financial institutions and traders.
Approaching its all-time high weekly close, Bitcoin’s price soared to a historic peak of $106,533 on Bitstamp, according to data from CryptoMoon Markets Pro and TradingView, marking a fresh record high.
For market participants, the outlook could hardly be any better as a result.
In a recent post on X, Filbfilb, the co-founder of DecenTrader, used a well-known phrase in the cryptocurrency sphere to express that this upcoming week is expected to be quite significant.
Some people, however, were taken aback because the prices surged unexpectedly before the U.S. Federal Reserve’s interest rate announcements. Normally, Bitcoin trends horizontally or downwards in the days leading up to these announcements.
In a recent market update, CryptNuevo stated that the predefined short liquidation points have been achieved.
“Didn’t expect it that fast at all, especially before weekly candle close so couldn’t position in futures for this one.”
The data gathered from CoinGlass shows that, as of this writing, the total crypto asset liquidations over the past 24 hours exceeded $300 million.
Sharing extended analysis with X, at the same time, Keith Alan, one of the co-founders of trading resource Material Indicators, emphasized that timing might be crucial right now. Interestingly, charts suggest that mid-December has traditionally marked significant shifts in Bitcoin’s direction.
In the past, significant shifts (MACRO moves) in the Bitcoin chart have often occurred near December 17th. If this trend continues, I anticipate one of two possibilities. It could indicate a decline that signals the peak has been reached, or it might lead to an upward surge toward the next phase.
“With a FED rate cut baked in for the Dec 18th meeting, I think we’ll see a breakout, however, I’m going to sit on my hands and allow candles to develop to gain some clarity.”
BTC price targets see 50% more upside
In simpler terms, the current Bitcoin prices are not at a balanced point, even in the near future. Traders have become more optimistic about Bitcoin’s price movement by the end of this year and possibly beyond, leading to increased anticipation.
Last week, I saw $110,000 becoming a widely discussed milestone, yet the price points keep climbing even higher with each passing day.
On December 15th, in a specific Bitcoin thread, well-known analytics account Bitcoindata21 proposed that the price point of $140,000 serves as a “foundational estimate” marking the start of Bitcoin’s initial significant downtrend.
“Bitcoin trends toward $140k+ by mid january for a short term top,” it confirms.
The orange on-chain indicator, currently sitting at approximately $128,693 and increasing by around $500 each day, is projected to reach about $140,000 by early January. This value aligns with the blue pi cycle line, which also resides in a comparable region.
According to Bitcoindata21’s analysis, several key markers are predicted to reach their peak simultaneously, which is roughly concurrent with the projected price point of $140,000.
The Market Value to Realized Value (MVRV) ratio associated with Bitcoin, which is currently under observation, may still increase further before the accumulated Bitcoin holdings show an exceptionally high level of profitability.
Other sources see $150,000 as a useful guide for the coming months.
Fed rate cut assumed as 2025 picture darkens
This week, the Federal Reserve is under a keen focus as they convene to discuss potential adjustments to interest rates.
On December 18th, it’s anticipated that the Federal Open Market Committee (FOMC) will gather and make a decision to lower interest rates by a quarter of a percent.
The Federal Reserve continues to grapple with concerning inflation figures. The combination of a sluggish labor market and certain price indicators surpassing predictions might lead to a scenario called “stagflation” – a term that signifies slow economic growth alongside high inflation rates and stagnant employment.
According to a financial resource called The Kobeissi Letter, both actual and anticipated inflation rates, as determined by the market, are currently higher than the Federal Reserve’s goal of 2%.
“We are at risk of a potential 1970s-style rebound in inflation into 2025/2026.”
According to Kobeissi’s report, asset manager Apollo has issued a caution that the Federal Reserve might consider increasing interest rates once more in the year 2025.
This week, it’s expected that the Federal Reserve will lower interest rates by a quarter of a percent once more due to the softening labor market, according to Kobeissi.
“We believe stagflation is coming in 2025, the Fed’s biggest nightmare.”
On December 21st, the Federal Reserve’s favored measure of inflation, known as the Personal Consumption Expenditures (PCE) index, will be published. The number of first-time unemployment claims is expected to be released a day earlier on December 20th.
According to the FedWatch Tool by CME Group on December 16, there was nearly universal agreement in the market that a 0.25% interest rate reduction was highly likely, with an estimated probability of approximately 97.1%.
Trump Bitcoin reserve talk grows louder
For three weeks in December, the talk among many has shifted from the latest record-breaking BTC prices to speculating just how much higher Bitcoin might climb in the future.
Due to recent news suggesting that the incoming U.S. President, Donald Trump, intends to establish a type of national Bitcoin reserve, there’s been an increase in market excitement and optimistic forecasts for bitcoin prices reaching unprecedented heights.
According to CryptoMoon’s latest report, there might be an initial shift towards Bitcoin as soon as Trump assumes office next month.
As an analyst, I’ve been considering a scenario where a presidential decree issued on the first day in office could be utilized for purchasing Bitcoin. This was suggested by Jack Mallers, the CEO of Bitcoin payment firm Strike, during his discussion with podcast host Tim Pool on December 14th.
“It wouldn’t be the size and scale of 1 million coins but it would be a significant position.”
On the same day, Forbes published a forecast suggesting that BTC/USD could exceed $500,000 if Trump’s proposed plan were to be implemented on a large scale.
Last week, he expressed to CNBC that we aim to achieve something remarkable with cryptocurrency, as we don’t want China or any other country to lead in this area; they’re adopting it, and so do we aspire to be the pioneers.
Over the weekend, Michael Saylor, CEO of MicroStrategy – a business intelligence company – suggested that they had bought additional bitcoins to augment their existing Bitcoin holdings.
“I will see you on the moon,” he wrote in a typical X post afterward.
Over the past few weeks, I’ve been adding Bitcoin (BTC) to my portfolio. Initially, there was a dip in the market following these purchases, but it quickly recovered and bounced back.
Open interest beats records as funding stays cool
Bitcoin open interest (OI) has hit new all-time highs as the market returns to price discovery.
According to CoinGlass, the total value of Bitcoin futures contracts currently stands at approximately $67.38 billion, marking a rise of around $4 billion over the previous 24-hour period.
The total amount held in Bitcoin futures contracts, which includes both long and short positions, is represented by “OI”.
An escalation in Open Interest (OI) might amplify market fluctuations because traders tend to take bigger risks based on price trends, only to find their investments falter when the market shifts direction opposite to their expectations.
According to CoinGlass, the funding rates for Bitcoin and most altcoins remain moderately increased, but Binance stands out as an exception for Bitcoin. Meanwhile, well-known trader Jelle finds the market conditions to be steady.
He shared with his X number of followers on December 16 that funding rates continue to stay at exceptionally high levels. It appears that there’s little concern from people in his timeline regarding these still quite appealing market conditions, which are actually cooler compared to numerous past price fluctuations.
“Pretty sure this goes a lot higher than many people think.”
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2024-12-16 12:20