December begins extremely optimistically for the cryptocurrency market, resembling:
→ December 2020, when bitcoin grew by 46.9%;
→ December 2017, when bitcoin grew by 38.9%;
→ December 2016, when bitcoin grew by 30.8%.
If there are psychological patterns in the increase in demand on the eve of the holidays, then perhaps they come into force, since on the morning of December 4, the price of Bitcoin exceeded the psychological barrier of 40k and reached 41,700 per coin — for the first time since April 2022.
Fundamentally, demand is based on expectations of the approval of several Bitcoin ETFs. The fear and greed index reached a value of 74, indicating growing greed. Another driver is expectations of Fed rate cuts, which leads to more affordable loans and, accordingly, increased demand for risky assets.
Technically, the price was in a consolidation zone in November. Buyers overcame resistance around the level of 38,000. The pressure of demand is evidenced by growing lows. When the resistance was behind, buyers did not encounter any tangible obstacles, which is noticeable in the width of the bullish candles.
Presumably, the price of bitcoin may consolidate near the upper boundary of the parallel channel — bulls will be motivated to take profits. But buying bitcoin now may mean trying to jump on a ship that has sailed away too far.
It is acceptable to assume that the market is in an overbought state, judging by the readings of the RSI indicator. Therefore, it is possible that the price of bitcoin may reach the upper limit of the channel and then correct.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
