Bitcoin is proving a difficult trade on December 21 as a new week begins with instant volatility after new all-time highs over $24,000.
After setting records across exchanges at the weekend, Bitcoin is feeling pressure as Wall Street opens for Monday trading.
Modern Consensus takes a look at what to expect from Bitcoin price action in the coming days. We also publish a weekly roundup every Friday, the latest edition of which can be found here.
BTC price turns on correction mode
Bitcoin saw fresh success on Saturday, climbing to seal a new all-time high of $24,217 on Bitstamp before lingering just below the $24,000 mark.
Traders had little time to enjoy the bullish sentiment, however, as come Monday, Bitcoin began to slope downwards in an accelerating loss pattern which has so far produced lows of $21,860.
Data from exchange orderbooks shows the scope of the trend, with firm selling pressure at $24,000 keeping bulls in check. Modest support has also appeared at $22,000, allowing some respite in an otherwise lackluster market.
As of press time, volatility is keeping analysts from making hard-and-fast suggestions about price trajectory, as Bitcoin moves up and down by hundreds of dollars at a time.
“I am still short, bear (divergences) continuing to build on the 4-hour for now,” popular trader Scott Melker told Twitter followers late on Sunday.
“That said, I hope this little flag rips up and I get stopped out and we go straight to 30K.”
In the absence of any bullish signals, however, other traders have yet to voice optimism for the short term—at least on Bitcoin.
In his latest tweet on Monday, Michaël van de Poppe said that while BTC/USD is facing a correction, the knock-on effect for altcoins could be anything but loss-making. He wrote:
“#Bitcoin is correcting, just like the majority of the markets are.”
“This means that the $USD values of #altcoins are also dropping, however, the $BTC pair of $ETH is consolidating and slightly bouncing upwards. That’s a good signal.”
Van de Poppe alluded to poor sentiment across macro markets as a result of coronavirus woes and the United Kingdom facing blanket trade and travel restrictions. The mood has weighed on stocks, while the dollar has benefited slightly from hope that the United States Congress will vote through a coronavirus stimulus package later on Monday.
MicroStrategy holdings top 70,000 BTC
As ever in the current setup, however, Bitcoin proponents new and old could hardly care less about short-term price movements.
On Monday, MicroStrategy, which last week completed a fundraising scheme to buy Bitcoin, confirmed that it had made its transaction and purchased $650 million of BTC. The company’s total holdings are now 70,470 BTC, purchased at an average price of $15,964.
“The acquisition of additional bitcoins announced today reaffirms our belief that bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value,” CEO Michael Saylor commented in an accompanying press release.
“We believe the proactive management of our balance sheet, combined with the improved revenue and profitability performance of the Company, have been significant factors in the recent appreciation in our stock price.”
Saylor, an outspoken supporter of Bitcoin over other assets such as gold, also made the headlines over the weekend as he offered to share his BTC acquisition “playbook” with Tesla CEO Elon Musk.
Musk, who is well known for teasing Bitcoiners on social media, launched a fresh round of enigmatic tweets in which he called Bitcoin his “safe word” but also claimed it is practically no better than fiat currency.
“Just kidding, who needs a safe word anyway?!” he added before appearing to champion meme-based altcoin Dogecoin, which itself has seen weekly gains of 40%.
Altcoins yet to awaken
DOGE meanwhile formed one of the few altcoins to stay in profit this week, as 24-hour performance of the vast majority of cryptocurrencies trended down with Bitcoin.
Traders are keenly eyeing the possibility of an altseason beginning, this nonetheless only slated to happen once Bitcoin commits to a consolidatory period.
As Van de Poppe has previously stated, altcoins do not benefit from rapid depreciation in Bitcoin, leaving short-term plays limited.
Ethereum, the largest altcoin, is in danger of losing $600 less than a week after recapturing the level. This came thanks to the announcement of futures markets from CME Group, one of the first Bitcoin futures operators. ETH futures will begin trading next year.