It’s been a good year for crypto assets. BTC hit a new all-time high of $ 24,300 after beating its previous all-time high of $ 19,700 in 2017. BTC has risen since the low in March this year during the COVID19 sell-off. over 600% and still trying to break the $ 24,300 mark. However, it faces some resistance at levels above $ 24,000 and has been sold every time it hits that level. While BTC may clear this resistance and rise in the future, that time may not be now for several reasons.
– Holiday season at the end of the year without traders listed on the market
– Institutional investors on bank holidays at the end of the year
– The resurgence of COVID in Europe presents some risk factors
– The US stimulus package that has just been approved is already included in the market price.
– SEC lawsuit against Ripple and XRP cast a dark shadow on Crypto Market
The end of the year and institutional investors are on vacation
With the holiday periods nearing the end of the year, the days around Christmas may not be helpful in making BTC get higher. The Christmas season is traditionally a quiet period for most institutional investors. For example, Grayscale mentioned that 6 of its crypto trusts, including BTC, stopped adding new clients. While you can continue to accept funds from existing customers, suspending the acceptance of new funds from new subscribers will significantly reduce the funds available to purchase cryptocurrencies, especially BTC.
The lack of institutional exposure is particularly shocking to BTC as its surge this year was spearheaded by institutional and corporate investors who bought it as a hedge against the depreciation of their respective currencies. It’s growing in popularity with U.S. investors who believe the U.S. has printed too much U.S. dollars in the past decade and has prompted many central banks to print money to fund stimulus packages since COVID 19 this year . Institutional investor involvement is particularly evident in the final quarter of this year, when more institutions and large corporations added BTC to their cash reserve. When these folks go on vacation, a void can emerge where there is no shopping to prop up the price of BTC or to drive it higher.
The resurgence of COVID19 and a new strain of virus in the UK spooked markets on a massive scale earlier this week, leading to sell-offs across all asset classes. BTC cut $ 2,000 from $ 24,000 to $ 22,000 before buying back over $ 23,000 to make up for lost ground. Until the air clears for COVID19, there may be some investors who are reluctant to risk trading or some investors may be waiting for lower levels to come.
US stimulus package with price
The second most anticipated stimulus bill in the US has finally passed, and $ 600 in cash is being delivered to Americans. While this will weaken the USD and therefore be good news for the crypto market, BTC has not been able to claim control over USD 24,000.
SEC lawsuit against ripple and XRP attenuation feeling
The SEC has just filed a lawsuit against Ripple and its two founders, claiming that XRP is a security and that the Ripple team has been running the continuous sale of the XRP token for seven years and violating federal security laws. This news hit the broad crypto market hard, and altcoins were hit by fears that other tokens might also be on the SEC’s watchlist. Although the SEC has expressly ruled that BTC and ETH are not securities, the overall market cooling and XRP loss of 50% for 2 days may have an indirect impact on BTC as a result of this news.
Even so, PrimeXBT lead analyst Kim Chua continues to see the outlook for BTC as positive and expects it to be above $ 24,300 after Christmas or after the start of the New Year when demand increases. SEC and COVID19 are decreasing.
About Kim Chua, Market Analyst at PrimeXBT::
Kim Chua is an institutional trading specialist with a track record that extends to major banks such as Deutsche Bank, China Merchants Bank, and others. Chua later launched a hedge fund that delivered consistently three-digit returns for seven years. Chua is also an educator at heart who has developed her own trading curriculum to pass on her knowledge to a new generation of analysts. Kim Chua actively pursues crypto and traditional markets, looking for future investments and business opportunities as the two very different asset classes merge.