Bitcoin price stability not indicative of future price action as ‘local bottom’ may have been reached
Analysts believe Bitcoin will most likely not dip below the $46,000 range, with positive movement likely on the cards now.
- The Fed’s upcoming plans to taper its stimulus policies might have spurred the ongoing turbulence.
- Bitcoin’s market dominance index has again soared close to 40% after having slid as low as 38% recently.
- Digital payment platforms, such as Block, PayPal and Coinbase, now allow their clients to send crypto gifts during the holiday season.
Volatility seems to be the order of the day. Bitcoin (BTC) continues to fluctuate between a price range of $46,600–$49,400 over the last 24 hours. The flagship crypto is currently exhibiting weekly losses of 5%. At press time, BTC is trading at a price point of $48,587.
On December 13, Bitcoin lost a key support level of $47,000. The market at large witnessed a major dip, taking the total capitalization of the sector to under $2.3 trillion. Most prominent altcoins also dropped by as much as 25% on the day, leading analysts to speculate that the price drops were largely linked to the upcoming Federal Open Market Committee (FOMC) meeting.
When the Federal Reserve convenes for the meeting, it will probably taper its ongoing stimulus packages — that is, reduce its bond repurchasing program. As a result of the uncertainty, Bitcoin outperformed the altcoin market at large, which had been doing well against the premier digital asset through October and November.
According to on-chain data analysis firm Whalemap, the coming few days could potentially see Bitcoin testing another one of its key support levels — i.e. $40,000 — allowing for an even greater buying opportunity for long-term investors. A spokesperson for the firm was quoted as saying: “If we start closing daily candles below the support outlined above, we will probably go to a lower one. The closest below us is around $40,000.”
Block to allow BTC gifting via its app
Prominent payments firm Block, previously referred to as Square, revealed earlier this week that it was set to allow users of its famous Cash App to gift family and friends BTC — along with other prominent crypto assets — as part of the ongoing festive season. A tweet from the firm read that users could send as little as $1 in crypto as of December 14.
The firm — which is estimated to have more than 40 million active users — is one of the many firms, including PayPal and Coinbase, to allow its clients to send crypto gifts. A couple of weeks ago, Fintech provider Unbanked revealed that it too was going to enable crypto donations for a program called Toys for Tots, which is run by the US Marine Corps.
Things looking up for Bitcoin?
Despite Bitcoin — as well as the market at large — taking a massive hit a couple of days back, derivatives data seems to suggest that $46,000 may be where BTC finally bottoms out and starts to rise again. Therefore, it will be interesting to see how the future of the cryptocurrency continues to play out from here on out, especially as many experts were projecting the asset to scale up to a price target of around $100K by the end of 2021.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.