Bitcoin Faces Critical Weeks Ahead!

As Bitcoin (BTC) commences a new week, its value hovers around $41,085, entering a zone of risk amid sell-offs by major holders, often referred to as 'whales.'

by Faruk Imamovic
Bitcoin Faces Critical Weeks Ahead!
© Getty Images News/Dan Kitwood

As Bitcoin (BTC) commences a new week, its value hovers around $41,085, entering a zone of risk amid sell-offs by major holders, often referred to as 'whales.' This change in momentum comes as the digital currency faces a critical period with just two weeks remaining until the year's end.

Analyzing the Market: Trends and Predictions

The recent weekly close has offered little reassurance to traders, interrupting the consistent upward trajectory of Bitcoin’s price. The focus now shifts to macroeconomic data releases, including the upcoming United States gross domestic product (GDP) figures, which are likely to influence short-term market volatility.

These releases come in the wake of significant actions by the Federal Reserve, which are already affecting the market. Traders and analysts, observing recent Bitcoin price movements, remain on alert for potential declines.

A trading resource, Material Indicators, highlighted in a post on X (formerly Twitter), "The Charts Don’t Lie." It noted that Bitcoin's fall below its 21-day moving average at the start of the week is "inherently bearish." The group anticipates year-end profit-taking and tax loss harvesting to dominate the near-term market.

Keith Alan, Material Indicators' co-founder, pointed out an ongoing tussle over a crucial Fibonacci retracement level, linked to Bitcoin's November 2021 peak. Adding to the analysis, popular trader Skew identified significant technical levels on weekly and monthly timeframes, including potential support around $38,000-$39,000 and resistance at $47,000-$48,000, which could influence trading strategies.

Fees and ETFs: The Ongoing Debate

The debate over Bitcoin transaction fees has intensified recently, with fees reaching their highest levels since April 2021.

Social media personality Fred Krueger addressed the issue, shifting focus to the anticipated decision on the first U.S. spot Bitcoin ETFs expected early next month. He observed that fees were quickly declining and defended the use of the blockchain by Ordinals' creators.

Additionally, on-chain analytics firm Glassnode reported a continued decline in new BTC addresses throughout December. Social media analyst Ali commented on this trend, noting its potential impact on Bitcoin's price trajectory.

"For a robust continuation of the bull rally, it’s crucial to see an uptick in the number of new $BTC addresses," Ali stated, underscoring the importance of network growth for sustained bullish momentum in the market.