YEREVAN (CoinChapter.com) – Bitcoin traded at approximately $16,800 on Dec 20 after a choppy performance in the previous 24 hours. Moreover, the leading digital asset could fall to $15,000 in the coming sessions due to a constellation of bearish factors.
BTC technicals disappoint the bulls
As CoinChapter reported previously, Bitcoin had formed a setup named the ‘rising wedge,’ best visible on the four-hour chart. Generally, the formation entails two converging trendlines that drive the asset price incrementally higher while lowering the price swing.
Despite the price increase, the rising wedge is a bearish reversal pattern and forecasts a drop equal to the maximal formation height. Notably, BTC broke the wedge to the upside, rising above the resistance on Dec 13.
However, as CoinChapter predicted, the buying pressure fizzled out shortly, forcing BTC/USD exchange rate to fall back into the setup.
BTC’s short-term target price remains at $15K
On Dec 16, the flagship crypto confirmed the rising wedge by falling below the latter’s support line, intensifying the bearish expectations.
Thus, the target of $15,000 is still valid, threatening Bitcoin with another 8% price slash. Meanwhile, due to a 3% intraday price increase, BTC arrived at a key resistance at just below $16,800. However, declining trading volumes testify to the investors’ low expectations, as they did not put enough weight behind the uptick.
As a result, the bearish prognosis remains, reinforced by headwinds from the broader economy.
Also read: Bitcoin Price Signals Bearish Turn, Why Upsides Could be Attractive to Sellers.
Stock market tumbles, exacerbating crypto woes.
As CoinChapter previously reported, the crypto market entered into a correlation with other risk-on assets, such as equities, due to an influx of institutional funds into the crypto sector in 2021. Thus, stock market fluctuations are likely to affect digital assets as well.
Following the latest Federal Reserve meeting on Dec 14, the stock market index S&P500 (SPX) tumbled over 7% and could see more pain in the upcoming sessions. As a result, the likely target for SPX stands at 3650, or an additional 4.4% lower than the Dec 20 position.
Given the bearish bias on the risk-on-asset market, Bitcoin might follow the lead, unlikely to pull off a sustainable rally. Hence, its target price for the short term would remain at $15,000 or lower.
Broader economic factors don’t favor Bitcoin bulls
Besides, the stock market itself depends on broader macroeconomic and geopolitical factors. The continuing war in Ukraine, rising tensions in the East, the Federal Reserve’s continuing interest rate hikes, and the rippling effects of the FTX implosion put a damper on Bitcoin’s upside attempts, threatening to take the market on another downturn.
Meanwhile, many retail investors saw the downward spiral as a BUY signal. As a result, the number of addresses holding 0.01 BTC or more increased, reaching an all-time high of 11.3 million.
Also read: Binance.US to acquire bankrupt Voyager, while its ties to parent exchange raise more FUD.
Is it time to buy Bitcoin? The answer depends on the individual strategy of each trader.
If the investor is potentially looking to hold for the long haul, the answer might be yes, even though the BTC price will likely bleed more in the coming month. Conversely, day traders should be warned of upcoming bearish continuation and act accordingly, as the red phase is not over yet.
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