Bullish view

• Buy the BTC/USD pair and set a take-profit at 17,500.
• Add a stop-loss at 16,000.
• Timeline: 1-2 days.

Bearish view

• Sell the BTC/USD pair and set a take-profit at 16,000.
• Add a stop-loss at 17,000.

The BTC/USD price remained in a consolidation phase during the Christmas weekend as demand for cryptocurrencies waned and outflows continued. Bitcoin has been consolidating at $16,800, where it has been in the past few days. This price is about 4% above the lowest level this month.
 

Crypto outflows continue

Bitcoin and other cryptocurrencies remained under intense pressure during the Christmas holiday break amid low demand. The fear and greed index remained in the fear zone where it has been in the past few months.

As a sign that this fear was being seen in the market, most exchanges have seen outflows in the past few months. Binance, the biggest exchange in the world, has lost over $9.5 billion in assets in the past 30 days. It now holds about $55 billion in assets, which is much lower than what it handled at the peak of cryptocurrencies.

Investors are afraid of several factors. First, there is significant fear that other crypto exchanges will go out of business in the coming months. 2022 saw the spectacular collapse of well-known companies like Voyager Digital, Celsius, BlockFi, and FTX, With crypto prices crashing, analysts believe that more companies are on the verge of collapse.

Second, there is a lingering fear of a recession in the US and other countries. The yield curve, which is one of the best predictors of recessions, has tumbled to the lowest level in decades. This is a signal that the global economy will likely sink into a recession in the next few months.

A recession will happen at a time when global central banks are tightening their policies. The Fed has already hiked interest rates by 450 basis points and hinted that it will continue hiking in the coming months. Bitcoin tends to react negatively to high rates.
 

BTC/USD forecast

The BTC/USD pair has been in a consolidation phase in the past few days. It has remained stuck at the 16,800 level, which is along the 25-day and 50-day moving averages. The pair’s Average True Range (ATR) has flattened, signaling that there is no volatility in the market. The same is true with oscillators like the Relative Strength Index.

Therefore, the pair will likely remain in this range on Tuesday as volumes are expected to remain low. The key support and resistance points to watch will be at 16,500 and 17,000.

(Click on image to enlarge)

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