Bitcoin Traders Expect Choppy Markets

The bitcoin price appears to be below $48,000, prompting analysts to forecast “choppy” markets until Q1 2022. Concerns about inflation and a general sense of apprehension about the global economy’s future continue to weigh on Bitcoin and altcoin prices. The Crypto Fear and Greed index is still in the fear zone. Despite a brief increase in market prices following the recent Federal Open Market Committee meeting, Fed Chair Jerome Powell indicated that interest rates would remain low for the time being. Overall sentiment in the crypto market continues to deteriorate, meaning that 2021 may end on a bearish note.

Analysts at Delphi Digital noted in a recent report that the price of Bitcoin sees to track changes in sentiment during market downturns closely and that it can often take some time for the trend to reverse. Delphi Digital went on to say that the current technical setup for BTC “leaves much to be desired,” particularly after the price fell back under the 200-day exponential moving average and is now testing the 200-day simple moving average.

Following the significant market pullback in May 2021, a similar setup observes. It took another two months for BTC to find a local bottom. The volume of stablecoins transacted has increased with the market pullback in May and recent weakness and volatile market conditions. The volume traded on December 14 rose to $57 billion, compared to a daily average of $10 to $20 billion. A similar spike in stablecoin volume observes during the May pullback, prompting Delphi Digital to warn that BTC and Ether prices could fluctuate for the rest of the year.

The Market Is Gearing Up

Jarvis Labs, a crypto analytics firm, expressed a similar expectation of choppy markets. He pointed to early bottoming signals based on a wide range of data. Jarvis Labs emphasized evidence of retail traders buying the recent drop and other signs that whales are accumulating in the current field. Still, the analysts also noted that the short-term holder realized price is $53,00. Hence, he advised traders to exercise caution until this level flipped. Finally, Jarvis Labs stated that the local bottom for BTC is now $42,000, but it must recover $53,000 soon.