Bitcoin price hits a low of $16,520 as a Santa Claus rally is nowhere in sight

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(Kitco News) – Last week’s Fed-inspired weakness in the global financial markets continued to impact asset prices on Monday, with both the crypto and traditional markets drifting lower throughout the trading day as traders accepted the fact that there may be no Santa Claus rally in 2022.

Following back-to-back weekly losses in the stock market, the S&P, Dow and Nasdaq began the last full trading week of 2022 on shaky footing, trending lower to close the day in the red, down 0.90%, 0.49%, and 1.49%, respectively.

Data from TradingView shows that after holding above $16,700 for most of the morning, Bitcoin bears overwhelmed the bulls and dropped the top crypto to a daily low of $16,520 before bullish reinforcements arrived to bid it back above $16,600.

BTC/USD 4-hour chart. Source: TradingView

Kitco senior technical analyst Jim Wyckoff mentioned the early morning weakness in BTC in his daily Bitcoin update, noting that the “strong selling pressure late last week [has] negated a price uptrend on the daily chart.”

As a result of today’s downside move, “Bulls have lost their overall near-term technical advantage and the bears now have some momentum on their side,” Wyckoff said.

Bitcoin has had a tough week

Further insight into the price action for Bitcoin was provided in the latest macro update from Eight Global, which kicked off by saying that “BTC has had a very tough week.”

“The price has made a bearish retest of the range low, followed by a strong reaction,” Eight Global analysts said, warning that “As long as the price is below the range low, chances are we will go a lot deeper based on the weekly timeframe.”

According to the update, the monthly demand found near $10,000 – $12,000 will serve as a strong support level, but “a lot needs to happen to push the price towards that $10-12k zone, as we still have several strong support levels at lower timeframes.”

A look at the four-hour chart for Bitcoin shows that the top crypto is trading in a range from $15,600 to $18,200, which it oscillated between during last week’s rate hike announcement from Fed Chair Jerome Powell.

BTC/USD 4-hour chart. Source: Eight Global

“This caused the price to perfectly fill the [fair value gap] up to $16.5k. Hence, we expect a bounce towards $17.2-17.5k, before making a lower high in that zone,” Eight Global said. “Should this indeed play out this way, we expect the price to find support at the first support level around $16.1-16.3k, or a bit deeper around $15.5-15.8k where the range low is also located,” the update concluded.

Rough going in the altcoin market

The struggles facing the crypto market were highlighted by the poor performance of the altcoins, as even the stablecoins were in the red in trading on Monday.

Daily cryptocurrency market performance. Source: Coin360

Still, several tokens managed to post positive gains for the day despite the widespread weakness. This includes Voyager (VGX), which gained 23.2% after it was revealed that the cryptocurrency exchange Binance US would be purchasing its assets for 1.022 billion, a 17.31% increase for BinaryX (BNX), and a 9.45% gain for XDC Network (XDC).

The overall cryptocurrency market cap now stands at $799 billion, and Bitcoin’s dominance rate is 40%.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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