Market Update: Bulls Receive Little Relief from TradFi’s Return
As the holiday season approaches, macroeconomic sentiment remains tenuous after last week’s hawkish United States Federal Reserve policy update. The return of traditional finance (TradFi) has provided little relief for Bitcoin bulls, who are now facing a gloomy liquidity outlook.
BTC/USD 1-Day Chart
- Data from Cointelegraph Markets Pro and TradingView tracked 1.2% daily losses for BTC/USD at the time of writing.
- After the weekend saw a spike to $99,500 extinguished by sellers, Bitcoin failed to recover lost ground, taking its drawdown from last week’s all-time highs to 15%.
Short-Term Price Performance: Support/Resistance Flips
Popular X analytics account Bitcoindata21 warned over support/resistance flips. "Underside retests and rejections of VWAPs are NOT what you want to see for bullish price action," they commented alongside a corresponding chart, referring to volume-weighted average price points.
- A retest of 92k for bitcoin looks likely.
- As of right now, 85-86k looks like the ‘back up the truck’ area to go all in, for bulls.
BTC/USD 1-Hour Chart
Bitcoindata21 chart:
Trader CrypNuevo Sees Lower Levels Returning
Popular trader CrypNuevo likewise saw lower levels returning before a broader market rebound, focusing on levels already seen during a down-wick to near $90,000 earlier in December.
BTC/USDT 2-Hour Chart
CrypNuevo chart:
Trader Jelle Compares Current Price Action to End of 2023
Even those with a more positive outlook could not rule out new lows coming first. Among them was fellow trader Jelle, who continued to draw comparisons between current BTC price action and that from the end of 2023.
BTC/USD Chart Fractal
Jelle chart:
Gloomy Liquidity Outlook for Bitcoin
With the holiday season approaching, macroeconomic sentiment remained tenuous after last week’s hawkish United States Federal Reserve policy update. Estimates saw little chance of interest rate cuts continuing in 2025.
Fed Target Rate Probabilities
CME Group FedWatch Tool:
- The next meeting of the Federal Open Market Committee, or FOMC, had a mere 8.6% chance of opting for one.
- As inflation rebounds, the pivot is at risk.
The Kobeissi Letter suggested on X:
Dwindling Global Liquidity’s Impact on Bitcoin and Crypto Markets
Earlier in December, Cointelegraph reported on the potential detrimental impact of dwindling global liquidity on Bitcoin and crypto market performance.
Takeaways
- Bitcoin faces a gloomy liquidity outlook as macroeconomic sentiment remains tenuous.
- Support/resistance flips are NOT what you want to see for bullish price action.
- A retest of 92k for bitcoin looks likely, with 85-86k being the ‘back up the truck’ area to go all in, for bulls.
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