- Bitcoin price has broken below $17,000 as bears initiated a 10% downturn.
- BTC potentially has a close to 80% chance of ending December with positive returns.
- A break above $17,145 is needed to pursue higher bullish targets.
Bitcoin price shows bearish technicals but optimism for the year-end Christmas rally lingers. Stock market data spanning nearly 100 years suggests that risky assets have a high chance of outperforming.
Bitcoin price is approaching Christmas
Bitcoin price is struggling after seeing a 10% sell-off last week. On December 14, the peer-to-peer digital currency showed bullish signals. The bulls had rallied back to the $18,000 level and moving averages provided a cushion during turbulent times in the market.
Within 24 hours, what initially seemed like another profit-taking consolidation quickly turned into a seller’s frenzy. Bitcoin broke the 8-day exponential moving average and the 21-day simple moving average and continued to move south towards the mid-$16,000 zone.
Bitcoin price is currently auctioning at $16,933, up 4% from Monday morning’s low of $16,256. While the countertrend surge is a positive gesture, by and large, BTC could be poised for more selloffs in the coming days. The recently broken moving averages confirm this notion as they will collide as BTC price auctions below.
A classic moving average crossing is likely to entice bears to add to their positions. If the market is truly bearish, a break of Monday’s low at $16,256 could trigger a downside to challenge the year’s low at 15,476 for a 7% drop. If a double bottom does not form near the yearly low, a BTC $14,000 is imminent.
The bearish techs may present a challenge for traders as many in the industry anticipate a Christmas rally. For the past few days, Schroders, a global wealth manager, has argued that risk assets have almost an 80% chance of ending December with positive returns.
The wealth management firm has been collecting data on US large-cap stocks since 1926 and found that December was the best-performing month. According to Schroeders, large-cap stocks have a 77.9% chance of ending December on a net positive note. The company calculates these metrics by dividing all percentage wins against percentage losses within a month. Investors should keep in mind that Bitcoin has a correlation of over 90% with the stock market this year. One could argue that the peer-to-peer digital currency will reflect stock market price fluctuations by the end of the year.
Bitcoin price is currently down 2% from December’s opening price of $17,167. It’s worth noting that Schroders has identified positive returns of at least 1.5% above the previous month. Therefore, bitcoin price would need to gain 3.5% through Jan. 1 and sustain price action near $17,550 to align with 100-year Schroder stock market data. The earliest signs of a Christmas rally would be a bullish hurdle-and-tilt of the colliding moving averages towards support. Indicators are currently positioned near the monthly open at $17,150
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BTC/USDT 8 hour chart
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