12.12.202211:47 Forex Analysis & Reviews: Bitcoin loses capitalization amid declining trading activity: what to expect this week?

Bitcoin ended the previous trading week on a bullish note. The asset formed a large cluster of purchases and Friday's fall did not give the sellers an advantage. The price of BTC held above $17k, which gave hope for an upward movement over the weekend.

There were no extraordinary events in the cryptocurrency market over the weekend, which caused a significant decrease in trading activity. As a result, Bitcoin changed minimally in price over the weekend.

However, as of 07:00 UTC on Monday, the cryptocurrency began to decline below $17k, threatening the upward trend. The main reason for the activation of market activity and the fall in prices was the Asian markets, where bearish sentiment dominates.

The situation around Gemini and Genesis, which remain on the verge of insolvency, adds to the general oasis of uncertainty and doubt. In addition, information appeared that trading in the shares of the mining company Argo Blockchain on the US and UK exchanges was suspended last week.

Content director for Compass Mining, Will Foxley, said that today, December 12, Argo may file for bankruptcy. For the cryptocurrency market, this may become a negative signal that will provoke a local sale of BTC.

Bitcoin and stock indices

Bitcoin finally restored the correlation with stock indices and is moving in unison with the stock market ambassador—SPX. Indicators are falling, but there is a possibility of a mutual upward movement at the opening of US markets.

As a result of today's trading day, Bitcoin is at risk of gaining a foothold below $17k, which means the cancellation of the bullish scenario and the movement towards $17.6k–$18.1k. With a strong buyer in the stock market, the cryptocurrency has a chance to recover above $17k.

BTC/USD Analysis

Following the results of the last trading week, Bitcoin failed to go beyond the range, which indicates the continuation of the consolidation period. The previous Monday also ended with a local fall in the price of BTC, followed by the absorption of sales volumes by the end of Tuesday.

A similar pattern may form this week as well. However, it is worth waiting for the opening of the US markets and see the reaction of investors. It is quite likely that Bitcoin will recover above $17k by the end of the current trading day.

In this case, the price of BTC will continue its upward movement to $17.4k, where the downward trend line and the sell cluster pass. For a successful breakout of this mark, Bitcoin needs to gain a foothold above $17k and demonstrate the growth of network indicators.

The possibility of a bearish scenario in which sellers manage to close below $16.8k–$17k also remains. News of the bankruptcy of a major mining player could be a catalyst and strengthen the downward movement. In this case, the price will retest the $16k level.

BTC/USD technical metrics on the daily timeframe confirm the presence of a seller who is actively pushing the price. The RSI index is gaining a downward movement, and the stochastic has formed a bearish crossover.

However, the four-hour chart shows the first active actions of buyers to protect the $16.9k level. The RSI reversed sharply in an upward direction, and the stochastic formed a bullish crossover. The current picture of BTC suggests that the fight for the $17k level will be the focus of today's trading day.

Results

The new trading week started with high activity of sellers and with the probability of another fundamental negative event (Argo bankruptcy). At the same time, the positions of buyers remain strong, and therefore an attempt to retest $17.4k at the end of this week cannot be ruled out.

As long as the price of Bitcoin holds the $16.8k–$17k area, the bullish idea remains relevant. With a full breakdown of this area and consolidation below $16.8k, Bitcoin will retest $16k. In the presence of fundamental negative factors, we may see another update of the local bottom below $15.5k.