Bitcoin price recoils as hopes for a Santa rally fade

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  • The price of bitcoin has changed over the past few weeks.

  • The Federal Reserve seemed more dovish than expected.

  • This has created a rising wedge pattern.

Bitcoin Prices continued to decline on Monday as investors remained concerned about monetary policy and the crypto industry. The BTC coin was trading at $16,750, where it has been for the past few days. The price is down a few points from last week’s high of $16,867.

No Santa Rally?

The price of BTC/USD has been steadily strengthening over the past few weeks. After making a comeback last week, the pair faced a pullback as investors weighed in on the latest Federal Reserve interest rate decision.

In its decision last week, the Fed decided to hike interest rates by 0.50% in its final decision of the year. It had raised rates by 75 basis points in the first of the last four monetary policy meetings. Also, as we write, the bank has decided to continue with the policy of quantitative tightening here,

The most important change was that the Fed would continue to raise rates in the coming months. That statement helped the market change its view on monetary policy. Ahead of the meeting, analysts were expecting the central bank to be a bit quieter since inflation has cooled.

Following the decision, US and global stocks fell while bond yields rose to their highest levels in weeks. US Dollar Index, which was falling recently, has made a strong recovery in the last few days.

The second main reason for the fall in bitcoin price is the increasing withdrawals from most of the exchanges. Binance, the world’s largest exchange, has seen its outflow exceed $7.5 billion in the last 7 days. Over the same period, Bitfinex saw outflows of over $335 million, while lost over $76 million.

Therefore, all these actions mean that the Santa rally has not taken place. A Santa rally is a situation where stocks gain momentum before the market opens.

bitcoin price forecast

BTC/USD Chart by TradingView

so, is it safe buy bitcoin, BTC price has been trading in a tight range over the past few days. During this period, it remained below the important resistance level of $16,867. It is also consolidating at the 25-day and 50-day moving averages.

Meanwhile, the Relative Strength Index (RSI) has formed a bullish divergence pattern, which is a bullish sign. It has also formed a rising wedge, which is usually a bearish signal. Therefore, there is a possibility that the coin will have a bearish breakout. If this happens, it could drop to $15,000.

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