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BTC: buyers pare the bulk of losses

The BTCUSD pair rose 2.12% to $50,441 on Monday, December 6. The gains were 20% of the recent low at $42k. Price action slid 27% on December 3 and 4, and a retracement to $57,600 is equal to 37% upside. Cryptocurrency market cap rebounded by $457 bln to $2.34 trln.

On Monday, buying interest in cryptocurrencies returned alongside rising risk appetite in global markets. The demand for risk-sensitive assets was partly triggered by media reports that the new Omicron strain is less dangerous than Delta.

On Tuesday, December, Bitcoin climbed above $51k. Buyers continue to buy back the Black Friday panic plunge in hopes of a retracement to November highs. Bitcoin is a tough nut to crack, and it just won't give up.

Bitcoin whale addresses (holding between 100 to 10k BTC) snapped up 67k bitcoins during the pullback. This buying means that the bullish trend is still alive.

The price rebounded to the 61.8% Fibonacci retracement level of the decline from $57,600 to $42k. Price action picked up ahead of the close of the daily candle. Gains came on the back of thin volumes, so the pair dropped to $50,800 before the opening of the North American session.

Buyers have pared over 50% of losses, but are still wary of new selling. This week’s economic calendar looks nearly blank, so the focus is on cryptocurrency news, as well as Covid-19 developments and Friday's US CPI report.

Omicron-related concerns have eased in recent days as more evidence from South Africa points to the relative mildness of this variant compared to previous Covid strains.

The PMoC has lowered reserve requirement ratio (RRR). This move aims to free up CNY 1.2 trln of long-term liquidity to support slowing economic growth. Risk assets showed a position reaction to the news.

The fixed-income, gold and FX markets will be watching US CPI data this week for any policy changes the Fed may announce next Wednesday.

Right now, we can see both positive and negative factors impacting the cryptocurrency market. This means that activity in all markets can be expected to pick up after the FOMC meeting.

Buyers look determined to raise the price to $56k. In terms of technical analysis, nothing prevents buyers from pushing higher. The market needs volumes, which are still anemic after last week’s rout. We believe that buyers will come alive if the price gains a foothold above $53,800. Support is located at $47k.


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