BTCUSD stabilized around the $41.500 after a turbulent stretch. As a result, the digital asset lost almost 8%. This raised forecasts of further volatility by the end of the year.
The token posted the drop from Saturday through Monday, marking its worst three-day performance since mid-August, according to data compiled by Bloomberg. The pullback from nearly $45.000 also led to the drop in the broader cryptocurrency market.
Some analysts blamed it on nervous speculators cutting positions ahead of the Federal Reserve's monetary policy meeting, which could cast doubt on aggressive wagers on interest rate cuts in 2024. However, most struggled to find a definite trigger, describing the pullback as an expected consolidation after Bitcoin surged 152% since the beginning of the year.
The token rebounded this year from a 2022 collapse as investors grew increasingly confident that regulators will soon allow the first U.S. spot Bitcoin exchange-traded funds. That could mean more demand for the digital currency.
According to Caroline Mauron, co-founder of digital asset derivatives liquidity provider Orbit Markets, cryptocurrencies finally faced profit taking after their significant surge over the past few weeks. She also expressed her expectation of increased volatility in the crypto asset class ahead of the ETF decision in early January, which could be exacerbated by reduced liquidity during the holiday period. The crypto industry is awaiting a decision on applications from BlackRock Inc. and others to launch U.S. Bitcoin spot ETFs. Bloomberg Intelligence expects a number of funds to receive Securities and Exchange Commission approval by next month.
BTCUSD quotes are forming a new uptrend on the D1 timeframe.
From the point of view of wave analysis, the price is in the formation of the first ascending wave. Relative Strength Index (RSI) indicator (standard values) predicts a change in the direction of the rate movement and transition to the second descending wave, which is reflected in the divergence. A descending wave is necessary to increase bullish positions.
The short-term outlook for BTCUSD is to sell.
The target is at the level of 36 000.
Part of the profit should be fixed near the level of 38 300.
A Stop-loss should be placed at the level of 44 960.
The bearish trend has a short-term character, so the trade volume should not be more than 2% of your balance.