Bitcoin price has entered an uptrend following the statement made by US Federal Reserve (FED) Chairman Jerome Powell on interest rates last week. In addition, positive expectations for Bitcoin exchange-traded funds (ETFs) continue to positively affect the price. What is expected in the coming period for Bitcoin, which is currently traded at $42,205?
Bitcoin price started the new week above $41,400, reaching a 17-month high. This increase was followed by gold, which reached a new record high on December 1. The common reason for this weekly increase in Bitcoin and gold could be the expectation of a rate cut. Investors are more confident that the Fed will change interest rates after Jerome Powell’s speech on December 2.
The Fed Chairman had said that they had raised interest rates sufficiently to combat inflation, but markets ignored Powell's words, stressing that it was premature to speculate on when tightening policy would ease.
A cut in interest rates has been a frequent cause of Bitcoin’s rise in recent years. At the same time, lower interest rates increase investors’ interest in riskier and less profitable assets like gold, Bitcoin, and stocks. Bitcoin’s price continues to gain momentum as the U.S. is looking more likely to approve a spot Bitcoin ETF application process that runs through January 2024.
The rise in Bitcoin’s price caused a significant divergence with the daily relative strength index (RSI), suggesting that the buying momentum at the highs in Bitcoin’s price is slowing down. From a technical perspective, a downside divergence could increase selling pressure. The risk of selling in Bitcoin is increasing further near the 0.5 Fib line in the $42,000 support-turned-resistance region. With the combination of these bearish signals, there is a high probability that Bitcoin’s price could drop to $35,780 by the end of December. The downside target is Bitcoin’s 0.382 Fib level and the 50-day exponential moving average (red wave).
IN THE MEANWHILE, MY BROTHERS, PLEASE DON'T MISS YOUR LIKES. EVERY SHARE IS FOR YOU. SO DON'T WITHHOLD YOUR SUPPORT. EVEN IF YOU HAVEN'T FOLLOWED US YET, DON'T FORGET TO FOLLOW US. WITH MY REGARDS.
