Bitcoin outlook: what should investors be paying attention to this week?
Tighter gridlock in Europe and statements by the Fed in the US could affect the price of Bitcoin (BTC) this week. Analysts point to the high turnout of investors making profits at current levels.
After recovering the significant range to $ 19,000, Bitcoin seems to be behaving as it has for the past few weeks: taking daily gains and then following up again. Accordingly, some analysts wonder whether the recent price hike is a sustained “weekend rally” or a bear trap.
At the time of publication, The price of Bitcoin (BTC) stands at $ 19,162, in a horizontal move on The Daily and weekly chart. By contrast, the monthly chart shows a 17.60% increase. This places Bitcoin among the top 5 highest-earning currencies in the top 10, behind Ethereum (23.42%), XRP (88.93%), ADA (43.74%) and Litecoin (24.20%).
Trader Michaël van de Poppe, “crypto Michäel, ” noted similarities between the current price increase and the previous months immediately before Bitcoin reached new heights. The cryptocurrency is on” potential bullish ” momentum, so investors should look closely at the $ 19,600 resistance and expect a turn for support as the price rises higher in the near – $ 20,000 range, as the analyst showed on the chart.
But investors also advised caution in the coming days. There are important events that can negatively affect the crypto market. New measures to control Covid-19 in Europe could have a similar effect, albeit smaller than those in March, when the crypto market largely collapsed. As Van de Poppe says, investors may prefer to move funds to more liquid exchange instruments:
“DESPITE EVERYTHING, I AM HEAVILY INVOLVED IN THE PRICE MOVEMENT NEXT WEEK. THERE IS MORE THAN ONE CONCERN SURROUNDING MARKETS; BREXIT NEGOTIATIONS, BUT ALSO TIGHTER GRIDLOCK IN EUROPE. IS FEAR AND MONEY THE KING WHO IS BEGINNING TO TAKE CONTROL? WE’LL SEE.”
Also, Trader AnnTrades noted that there will be big events in the US all week. The Federal Reserve is expected to make its final decisions for 2020, starting Tuesday with a meeting of the Federal Open Market Committee (FOMC). The results of that meeting will be announced on Wednesday with a high likelihood of changes to the Fed’s asset purchase program.
Notable events this week:
TUE: FOMC meeting begins
WED: FOMC announcement (14: 00 EST)
THU: accommodation starts (08: 30 EST)
Jobless claims (08: 30 EST)
Philly Manufacturing Index (08: 30am EST)
FRI: quad magic $ SPY $ QQQ $ IWM $ TQQQ
AnnTrades (@AnnTrades) December 13, 2020
The Federal Reserve’s announcements in 2020 have been hugely beneficial for Bitcoin. The unprecedented wave of adoption of the cryptocurrency by institutions is based on an attempt to protect wealth in the face of possible inflation in the dollar. MicroStrategy and Square adjusted Treasury policies accordingly.
Bitcoin price trapped in a waiting game
On the other hand, Willy Woo has a market update for the next few days. As the chart below shows, the “spent output profit ratio” is at a high level. This metric shows that there is a large proportion of investors who decide to take profits at current price levels.
Woo believes this will allow the price of Bitcoin to remain horizontal until early 2021, when “profiteers run out.” This could happen if the pressure to buy Bitcoin from institutions increases. A scenario that seems to be happening, as woo notes: