Bitcoin prices have been consolidating into a tight range around the $17,000 mark over the past one month.
Even today, the world’s largest crypto barely budged amid headlines surrounding fallen crypto titans:
- FTX co-founder Sam Bankman-Fried has been arrested in the Bahamas
- Terraform Labs co-founder Do Kwon, of the TerraUSD/Luna implosion infamy, has apparently been hiding in Serbia
Such reports are more useful as theatrical drama that can keep feeding online chatter, rather than offering meaningful clarity on the future of crypto.
There are, after all, broader contagion fears still swirling about.
Also, from a fundamental macro perspective, there are key events this week that are set to have a much greater impact on the market’s appetite for risk assets (including cryptos):
- Tuesday, December 13: US November consumer price index (CPI)
Markets predict a year-on-year advance of 7.3% for the headline CPI, which would be lower than October’s 7.7% figure.
- Wednesday, December 14: Federal Reserve rate decision
The Fed is widely expected to hike by another 50 basis points, which would constitute a smaller hike compared to the 75bps hikes at each of the FOMC’s past 4 policy meetings. Anything else than a 50bps hike would be a major surprise!
Also, markets are ready to pounce on the latest signals contained in the FOMC’s incoming policy statement, and/or the latest guidance offered during Fed Chair Jerome Powell’s press conference. Markets want to know about the Fed’s plans for raising US interest rates – how high and for how long – going into 2023 and beyond.
Overall, a cooler-than-expected US inflation figure, coupled with a Fed that’s more open to a “pivot” (not hiking its benchmark rates much higher past 5% before cutting rates in the second half of 2023), would be a welcomed boost for risk assets, including the crypto world.
That may offer some near-term relief for Bitcoin, with bulls potentially sizing up the following levels as immediate resistance levels to test:
- $17,417.50 = December 5th intraday high
- $17,862.44 = 50-day simple moving average (SMA)