Bitcoin is still trading sideways below its $17,000 resistance level, but some analysts have said the token may break that barrier before 2023.
After trading under the $16,800 support zone for a while, Bitcoin posted a new high of $16,962 on Wednesday evening. The token began to decline after hitting that high, moving back below its support zone. Bitcoin, however, started a bullish trend to nearly hit $16,840.
Data showed that Bitcoin tested the key support zone of $16,550, as a new low was formed around the $16,561 mark and then quickly consolidated its losses. Fib retracement — analysis used to determine support and resistance level — shows a 23.6 level for the key support zone of the downward movement from the new high to the new low.
On the upper level, Bitcoin’s immediate resistance is close to $16,720. It is close to the 61.8 percent Fib retracement level of the downward move from the new high to the new low.
According to analysis, Bitcoin's main barrier is close to the $17,000 level. If the token posts a clear move above that level, it is expected to kickstart a steady price consolidation.
Above the $17,000 mark, Bitcoin must push through the $17,200 resistance point. Two other resistance zones that Bitcoin must get through to maintain bullish momentum are $17,500 and $18,000.
Although some analysts have said Bitcoin can achieve bullish momentum before the New Year, its price can continue a downward move if it fails to break the $16,800 resistance. An immediate support zone after falling below the current $16,550 support level is $16,350. Bitcoin may even trade at around $16,000 a unit if it can break that support level.
Research organization Santiment explained that the declining interest among crypto whales in Bitcoin contributed to the token’s ranging prices. Santiment posted a chart that displayed a correlation between large Bitcoin transactions — commonly done by whales — and overall price strength. Large transactions above $1 million are currently at the lowest rate since December two years ago.
Meanwhile, QCP Capital shared a pessimistic outlook for Bitcoin in the future. The crypto trading firm's analysts said Bitcoin would extend its decline at the beginning of 2023 as the U.S. dollar and government bonds strengthened.
According to QCP Capital, big rallies in BTC will encounter “significant selling pressure.” The firm also pointed out that the exchange-traded fund of ARK Invest’s ARK Innovation (ARKK) has influenced the BTC price movements in two months, foreshadowing a downward move for the token.
Bitcoin analysts Toni Ghinea also leaned toward a bearish trend for Bitcoin in the coming weeks.
“The sell-off will accelerate in the coming weeks,” Ghinea wrote on his Twitter page. “This bear market is far from over.”
Bitcoin reached its highest-ever value of $69,000 a unit in November last year. Compared to that all-time high, Bitcoin has lost 72 percent of its value. Its year-to-date loss as of Wednesday was 60 percent.
Bitcoin performs worse than stocks
This year marks Bitcoin’s worst performance since the crypto crash in 2018. Like that period, Bitcoin performs worse than the traditional stock market in 2022 — except for Tesla and Meta.
Tesla Lures $2.8 Billion From Korean Day Traders Amid Stock Drop 🇰🇷https://t.co/JwktTbMN3k
— Whole Mars Catalog (@WholeMarsBlog) December 28, 2022
The unstable macroeconomic situation, namely inflation, puts pressure on the Bitcoin price throughout the year. The Federal Reserve’s decision to adopt a hawkish monetary policy by raising the benchmark interest rates significantly this year caused people to resort to safer investment instruments, such as the greenback.
Furthermore, inflationary pressures led to bankruptcy declarations from some well-known crypto companies, including Three Arrows Capital and FTX. The bankruptcy cases also increased skepticism toward the crypto industry since many customers do not know whether they will get their money back.