Bitcoin (BTC) Consolidation Phase Underway? December 19, 2023 Crypto Analysis

Bitcoin ended the second week of December on a negative note, recording a 5% decline. However, it has started the new week on a positive note. Let’s examine the future outlook for BTC’s price together.

Bitcoin (BTC) Situation

After reaching an annual high of $45,000 at the beginning of the month, the Bitcoin price saw a decline of 10%. It dropped to around $40,000 before recovering to about $43,500, a level that seems to have acted as short-term resistance. Indeed, it was from this threshold that BTC weakened. Nevertheless, it quickly reclaimed this level after bouncing off of $40,500.

This morning, the BTC price is trading around $43,100. It hasn’t fallen below the psychological threshold of $40,000. Moreover, it remains above its 50 and 200-day moving averages, which reinforces the idea that Bitcoin is still on a medium-term bullish trend. On the oscillator front, they are seen to be maintaining above the median threshold. However, a daily divergence is still about to be confirmed, particularly on the RSI, which suggests an upcoming bearish period.

The current technical analysis has been carried out in collaboration with Elie FT, an investor and trader passionate about the cryptocurrency market. Today a coach at Family Trading, a community of thousands of independent traders active since 2017. There you will find live sessions, educational content, and mutual support about financial markets in a professional and warm atmosphere.

Focus on Derivatives (BTCUSDT)

At the start of this week, the BTCUSD open interest was revised upwards, as was its price. It increased by over 7%. That represents nearly 540 million dollars of positions (Long and/or Short) added to the market. Therefore, all these elements demonstrate an increase in trader commitment in the market, especially on the buyers’ side. Regarding liquidations, they are not particularly significant. However, it can be highlighted that the most recent ones favor buyers, being predominantly sellers. This could indicate that the selling force is weakening.

The BTCUSD liquidations heatmap shows two areas where a large number of orders are concentrated. Above the current price, the $43,800 zone is notable. Below, the $40,500 – $40,100 zones also merit attention. As the market approaches these levels, it could trigger a large number of orders and, consequently, increase the cryptocurrency’s volatility. These zones are therefore potentially attractive to investors.

Hypotheses for Bitcoin (BTC) Price

If the Bitcoin price manages to stay above $40,000, we could anticipate a reintegration of the $45,000 threshold. The next resistance to consider, if the bullish movement continues, would be the $48,000 to $50,000 range. At this point, it would represent a gain close to +17%.

If the Bitcoin price fails to hold above $40,000, a return to $39,000 could be envisioned. The next level to consider, if the bearish movement persists, would be around $38,000. At this stage, it would represent a decline close to -10%.

Conclusion

Having failed at $45,000, the Bitcoin price tends to recover from its decline. Therefore, increased support from buyers would be necessary to reinforce the hypothesis of a bullish continuation. Thus, it is crucial to closely observe the price’s reaction to different key levels to confirm or deny the current hypotheses. We must also remain vigilant against potential fake outs and market squeezes in each scenario. Lastly, remember that these analyses are based solely on technical criteria. Cryptocurrency prices are also likely to move quickly due to other more fundamental factors.