Bitcoin regains support at the $16k price level  (2024)

Last week, the price of Bitcoin and major altcoins became very bearish after the news release of the Consumer Price Index (CPI) and FOMC data outcomes.

Due to the heavy impact news Bitcoin fell from $18,100 down to the $16,300 mark price before regaining a new support level.

Bitcoin lost over 2.0% in its market price while other major Altcoins had a slight depreciation in value,

However, the price of Bitcoin has been able to main new support at the $16,300 price mark for the last few days.

Bitcoin on a one-day chart

Looking at Bitcoin on the one-day chart, we can see a knife drop in its price from $18,000- $16,300 before the bulls regained support at the level and started pushing the price up.

However, this week may become bullish for the crypto market due to the fact that this week is the Christmas season, which may make the price of Crypto assets increase in value as friends and family may want to send cryptocurrency to their loved ones globally without the need of bank intermediaries for a faster transaction.

Bitcoin claims its new support.

Price Analysis

Analyzing Bitcoin in the 4-hrs timeframe we can see last week was in clear bullish movement which set the price into an uptrend.

As the traders anticipated lots of liquidity grabs, targeting the stop loss of short sellers in the market created more liquidity to fuel the price into a bullish momentum.

The price of Bitcoin was bullish until the release of the Consumer Price index (CPI) which disrupted the bullish order flow to cause a change of Character (COCH) in the price of bitcoin.

Bitcoin forms a COCH, what to expect from BTC

Analyzing the 4-hrs timeframe of the Bitcoin price chart,

We can see a clear Change of Character(COCH) in the market structure of Bitcoin.

Traders will expect the price of Bitcoin to form a short-term rally to push the price upward to fill up an order block before reversing back down to clear internal range liquidity.

The Change of character in Bitcoin also signifies a possible bearish move incoming, as the price may start forming lower highs and lower lows to complete a downtrend.

In addition, interest rates were raised by 50 basis points by the central banks of the United States, England, the European Union, and Switzerland, reaching multiyear highs and signaling that borrowing costs would probably rise for longer than the market had anticipated.

Following the abrupt departure of two of the most renowned auditors, which left exchanges in limbo, uncertainty in the cryptocurrency markets returned. The French auditing company Mazars Group has removed a section of its website devoted to cryptocurrency audits. Mazars Group previously worked with exchanges like Binance, KuCoin, and Crypto.com.

Armanino, an accounting firm, is said to have stopped offering crypto auditing services. The auditor worked with a number of cryptocurrency trading sites, including the failed FTX exchange, Gate.io, and OKX. Oddly enough, back in 2014, Armanino was the first accounting company to forge connections in the cryptocurrency sector.

To better appreciate how professional traders are positioned in the present market environment, let’s look at derivatives measures.

These are fundamental factors that could cause the price of Bitcoin to become more bearish.

Leverage buyers are gradually been weakened

Externalities that may have just affected the stablecoin market are not included in the long-to-short statistic.

In order to provide more insight into how professional traders are positioned, it also collects data from exchange clients’ positions on spot, perpetual, and quarterly futures contracts.

Since there are sometimes methodological differences between different exchanges, readers should focus on trends rather than absolute numbers.

Top Bitcoin traders’ long-to-short ratios on exchanges. Source Coinglass

According to the long-to-short indicator, professional traders reduced their leveraged long bets as Bitcoin broke below the $16,800 support.

In the case of Binance traders, the ratio marginally decreased from 1.11 on December 14 to the present 1.04 level. The indicator for Huobi’s long-to-short ratio decreased little throughout this time, going from 1.01 to 0.05.

Last but not least, the OKX exchange’s measure dropped from 1.00 on December 14 to the current ratio of 0.98. As a result, traders have on average reduced their leverage-long ratio over the past five days, which suggests decreasing market confidence.

There will probably be a $16,000 retest in the future.

When combined with data on top traders’ long-to-short indicator drop, the modest 101.8% stablecoin premium in Asia paints a picture of purchasers progressively giving in to pessimism.

Additionally, the $206 million liquidation of long BTC futures contracts indicates that buyers are still using excessive leverage, which creates the ideal conditions for another leg of decline.

For the time being, conventional stock markets continue to have a significant influence on the price of bitcoin. Still, the likelihood of a $16,000 Bitcoin retest is increased by the lack of reliable macroeconomic data and the uncertainty introduced by crypto auditing companies.

Crypto Analysts’ Bitcoin Predictions

If Bitcoin manages to break through the $16,900 barrier, cryptocurrency analyst Michael van de Poppe anticipates that it will likely have a strong continuance. In addition, maintaining support at the $16.5K level is essential for Bitcoin’s price to continue its ascent toward the $18,000 mark.

Earlier, Rekt Capital hypothesized that it will be critical for Bitcoin and alternative cryptocurrencies for the price of Bitcoin to maintain its position at $17,150.

Conclusion

If Bitcoin ended the month with a price that was lower than the support level, then a move toward $13,900 may be anticipated.

Additionally, $18,000 is a key level of resistance for Bitcoin, and the only way for the cryptocurrency’s price to make significant headway is if it can break through the $18,000-$19,00 range.