Bitcoin started the new week on a somber note, falling nearly 2% to around $95,651 at the time of writing. Prices have been confined to a range from $90,000 to $98,000 over the past two weeks, continually thwarted by the resistance level of $100,000 – a significant psychological milestone – impeding the upward momentum.
Analyst Valentin Fournier of BRN highlighted significant barriers holding back Bitcoin prices from surpassing $100,000.
"Although the market has many positive catalysts and investor confidence is rising, Bitcoin still struggles below the psychological threshold of $100,000. Profit-taking activity is clearly increasing, and a significant sell wall of over 4,000 Bitcoins (equivalent to approximately $384 million) needs to be cleared before prices can surpass this level."
BTC 4-hour price chart | Source: Tradingview
The slowing Fed rate-cut cycle could impact risk assets.
One of the main macroeconomic factors currently affecting Bitcoin is the broader financial market environment, particularly expectations regarding the U.S. Federal Reserve's (Fed) interest rate decisions. Recently, investors have lowered expectations for aggressive rate cuts, with CME's FedWatch tool currently placing the likelihood of a 25 basis point rate cut at the Federal Open Market Committee meeting on December 18 at 61%, down from 67% on Friday.
As the dollar strengthens, global liquidity often tightens, making risk assets like cryptocurrencies less attractive to investors. Since the U.S. election on November 5, the U.S. Dollar Index (DXY) has risen from a low of 103.42 to 106.22, according to TradingView data.
This week, investors will closely monitor key economic indicators that could further support the strength of the dollar, such as the November non-farm payroll report and speeches by Fed officials, including Chairman Jerome Powell's speech at the New York Times DealBook Summit on Wednesday. Such events may provide insights into inflation trends and offer clues about future monetary policy, potentially impacting both the price trajectory of the dollar and Bitcoin. Additionally, U.S. ISM manufacturing data released on Monday and PMI data released on Tuesday will be watched for signs of economic strength or weakness.
U.S. stock markets surged to record highs despite concerns over tariffs.
Despite Bitcoin's modest price correction over the past 24 hours, U.S. stocks reached record highs even as tariffs proposed by president-elect Donald Trump raised concerns about potential disruptions to international trade. U.S. stock indices ended both the week and November strongly, with the Dow Jones and S&P 500 hitting new record highs on Friday. In November, the Dow rose an impressive 7.5%, while the S&P 500 reported a solid gain of 5.7% and the Nasdaq 100 followed with a 5.2% increase.
However, economists warn that the broad tariffs proposed by Trump could increase the cost of everyday goods in the U.S. due to the complexities of the global supply chain and could also hinder global economic growth. In contrast, the president-elect has argued that such measures could revive domestic manufacturing and strengthen the U.S. government's influence in trade negotiations.
Despite ongoing fears about protectionist trade policies, deVere Group CEO Nigel Green remains optimistic about the long-term outlook for risk assets.
"Investors are reassessing strategies for next year, looking to capitalize on sectors that benefit from a more business-friendly environment. With stocks having a particularly strong year and a historically robust December approaching, the backdrop is set for further growth moves."
Green predicts an 80% chance that the market will end positively this year, consistent with historical trends showing that December is often a favorable month with strong investment activity and positive returns.
