Analyst Identifies Key Factors Capping Bitcoin’s Rise

Bitcoin is trading below $90,000, indicating weak buyer interest.

As of December 14, Bitcoin is trading below $90,000, indicating weak buyer interest. Under these circumstances, the crypto market is not yet ripe for growth, an experienced trader, who wished to remain anonymous, told ForkLog. 

According to the speaker, the ongoing correction is linked to high sales volumes in the spot markets. 

Primarily, assets are being sold by holders of crypto-ETF and DAT companies, who “loudly proclaimed their purchases but remained silent about their sales.” Consequently, there have been liquidations of long positions in derivatives. 

The expert also highlighted a fundamental negative factor—the worsening of lending conditions.

Discussing market influences, the trader identified the spot market as the most crucial segment, although futures also have significant volumes and exert some influence. Meanwhile, inflows into exchange-traded funds are becoming an important indicator to monitor. 

Options are relatively small in size, thus currently exerting minimal impact on prices.

Near-term Prospects

December is traditionally a period of declining volatility, the trader noted. By the end of the month, “there will be no one left to trade,” as Christmas approaches in the US and Europe.

According to his forecast, new market highs are possible only if President Donald Trump gains control over the Fed and begins devaluing the dollar.

“His policy lacks this. Of course, a rebound might happen, but it won’t be about setting new records,” the speaker added. 

Among the few positive factors is the start of quantitative easing by the Fed. Following a key rate cut on December 10, the regulator announced plans to purchase $40 billion in Treasury securities.

The trader suggested that monthly accumulation volumes could reach $40 billion to $120 billion with breaks throughout the year. This will support the markets, although the expert described the sums as not the largest.

“Trump could completely change the game by replacing the Fed chair, which would cause a shock initially, but then he would actively lower rates, devaluing the dollar. It’s like a proverbial grey swan in the market,” the interlocutor emphasized. 

He clarified that the change of the Fed chair will occur without US presidential intervention next May. Most likely, a candidate loyal to Trump will take the position. 

Earlier in December, a trader under the pseudonym Roman suggested a decline in the first cryptocurrency’s price to $76,000. He stated that the asset’s price is stuck in an ascending channel, which threatens to turn into a “bear flag.”