Bitcoin Faces High-Risk Week Amid Whale Sell-Offs and Market Disbelief
Summary:
As Bitcoin enters a new week, it faces an atmosphere of high risk fueled by large-scale Bitcoin sales by whales. The previously anticipated "Santa rally" feels less likely as high transaction fees deter Bitcoin holders. Despite the current condition of "greed" within the crypto market, there's space for an increase as market disbelief dissipates. Attention is being drawn towards the potential approval of a spot ETF next month while data releases for the rest of December may stir volatility. The Federal Reserve's actions also continue to influence market trends.
As Bitcoin (BTC) makes its way into another week, it enters a high-risk territory. Alarms sound as large-scale BTC sales by whales trigger a shift in market trend. Bitcoin traders have been litte comforted by the most recent weekly close as the steady BTC price increase takes a break. With only two weeks left of the current year, the risk factors are escalating with digital assets while the countdown begins. The month of December will continue to be peppered by significant data releases, capable of stirring short-term volatility. Market observers watch closely as last week's actions from the Federal Reserve ricochet through the markets, with the release of US GDP being next in queue. The once anticipated "Santa rally" for Bitcoin seems less likely now. With higher transaction fees leaving Bitcoin holders dissatisfied, industry experts suggest shifting focus to the potential approval of a spot ETF next month. Despite a market leaning towards "greed", the atmosphere does not seem to be conducive for long-term sustainability. There may still be space for a further increase as market disbelief unfolds. With an impending critical period for yearly BTC performance, Cointelegraph delves deeper into these factors.
Bitcoin closed at approximately $41,300 on December 17 amidst an ongoing sell-off for BTC/USD. The cryptocurrency continued to dip over time, ultimately reaching around $40,800. However, BTC rebounded on the Asian trading floor to return just above $41,000, according to data from Cointelegraph Markets Pro and TradingView. Given the recent bearish BTC trend, market analysts continue to remain cautious.
The Fed is set to release the November print of the Personal Consumption Expenditures (PCE) Index - its preferred measure of inflation - later this week. Following last week's significant decisions by the Federal Reserve, new data must indicate that inflation is declining as we approach the new year. Despite market shocks, the next Federal Open Market Committee (FOMC) meeting to determine changes in interest rates is not set until January ends. However, the prospect of a Fed pivot is currently circulating within market discourse.
With transaction fees of Bitcoin reaching their highest level since April 2021, the discourse has become heated. At the weekend, those wishing to process transactions on-chain had to pay a hefty $40 fee. Despite the outrage, some argue that the fee market operates as it should given the competition for block space. While mining revenue has soared, the trend has also led to dissatisfaction. However, with transaction fees already witnessing a considerable fall at the beginning of the week, speculation continues.
The rate of growth within the Bitcoin network has slackened this month, corresponding to the bull market's revival. On December 17, approximately 373,000 addresses appeared in an on-chain transaction for the first time, marking a downtrend in new BTC addresses since November. The recent cooling period in the Bitcoin market has resulted in a lull for market sentiment as well. Currently, the Crypto Fear & Greed Index scores the overall market mood as 'greedy', albeit with less intensity compared to the previous month.
This article does not constitute investment advice or recommendations. Every form of investment and trading involves risks; readers are advised to conduct personal research before making any decision.
Published At
12/18/2023 11:45:47 AM
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