Bitcoin (BTC/USD) remains on a limited upside
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Bitcoin lost 1% on Monday ahead of US inflation data.
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A crypto analyst expects the inflation data and the Fed’s meeting to affect Bitcoin.
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Bitcoin lacks a directional bias and can move in any direction.
Bitcoin (BTC/USD) traded down more than 1% on Monday, with the cryptocurrency’s price just below $17,000. Bitcoin has been trading at this level since the beginning of the month. The price is also slightly improved from $16,000 at the end of November. But should we expect this price to improve?
The limited upside in Bitcoin perhaps underscores that investors are still cautious about buying cryptocurrencies. That means a significant number expect Bitcoin to fall further as the risk on sentiment remains. Likewise, buyers are defending the $16,000 level. But as this bull-bear scenario unfolds, a popular crypto analyst expects two macro events to crush BTC further. Analyst Nicholas Merten says markets are warming up for the US inflation report and the Fed’s last meeting of the year.
The US inflation report is due on December 12, followed by the Fed’s meeting on December 14. Higher-than-expected inflation is likely to increase speculation about policy tightening by the Federal Reserve. The analyst already says that 80% of the market expects the Fed to raise interest rates by 50 basis points. If inflation heats up, this will require faster increases.
Even if the Fed is not betting on rapid interest rate hikes, Merten says the markets will still be under pressure. The analyst says the lingering effects of past policy actions may last longer.
BTC on slight upside amid weak momentum
BTC/USD Chart by TradingView
On the technical front, BTC trades within narrow ranges. The long-term momentum is bearish, although the cryptocurrency recovered slightly above $16,000. BTC’s next resistance is at $19,000, while support is at $14,000.
Will BTC go lower or higher?
A limited upside means that Bitcoin price can trade lower if the macro factors are not positive. Investors will monitor the inflation report and the Fed’s action for indicators of where BTC will go next.
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