FX.co ★ Bitcoin & Ethereum: Calm Before the Storm

The cryptocurrency market has been performing badly since the beginning of December. In the beginning, there was a sharp drop of more than 25% in Bitcoin, and after a partial recovery. But the fear of a trend reversal is still present in the market.

Many traders are afraid that the overheated U.S. stock market, which is still updating historical highs, will collapse under pressure from the Federal Reserve System (FRS). This will lead to a reaction on risky assets, for example, cryptocurrency. For this reason, we are already seeing concerns in the crypto market with a characteristic correction.

The results of the Fed meeting will be published on Wednesday, December 15, where the regulator will surely accelerate the pace of tapering the quantitative easing program. As a result, QE will end even earlier. The most cardinal assumption, thus far, is the prediction that the Fed will raise the interest rate at the end of the December meeting. This will lead to a strong blow to the stock market and, of course, to the cryptocurrency.

So far, we are dealing only with assumptions, and the market is still at its height, and only fears of change frighten traders.

Meanwhile, the well-known company MicroStrategy, led by Michael Saylor, has again increased its cryptocurrency reserves by 1,434 BTC, which is about $82.4 million. The average purchase price was $57,477. This once again indicates that major players are not afraid of a trend reversal in the long term. All corrections, pullbacks, and other speculations are bought off by Whales, who easily take the cryptocurrency from weak hands.

In turn, VISA continues to work on the adaptation of new services. So, they create a special unit to advise their clients on cryptocurrencies and blockchain. VISA also released a report entitled "The Crypto Phenomenon: Consumer, Attitudes and Usage," where the payment giant claims that almost a third of respondents interact directly with cryptocurrencies, and almost 40% of cryptocurrency owners plan to change their bank to one that will offer services related to digital assets.

In simple words, everything is going to ensure that in the near future we will be able to pay for any everyday product with crypto.

Based on this, the message of large players becomes clear, who are not particularly afraid of short-term price changes.

What is happening on Bitcoin and Ethereum trading charts?

Bitcoin is moving along the psychological level of $50,000 for the second week, having an amplitude of about 10%. All this resembles the stage of waiting for something strong and influential. In our case, this is the Fed meeting. Thus, after December 15, this range is likely to lose its strength, and the market will determine the direction for itself. It should be noted that the downward trend scenario considers only the corrective course relative to the upward trend. That is, even in the event of a sharp collapse of 20-35%, recovery will follow.

As for the upward scenario, traders are still considering updating historical highs in the direction of the $100,000 level.

Ethereum chose the $4,000 level as the balance of trading forces, along which it has been moving for quite a long time. On the chart of the daily period, only a correction is visible, which was replaced by stagnation. That is, the upward trend remains as it was on the market. Even if the price drops to the levels of $3,500- $3,000, the trend will continue to exist.

According to Bloomberg, 2022 will mark the massive adoption of cryptocurrencies in the United States, with proper regulation and a subsequent bullish trend.

The index of emotions (aka fear and greed) of the crypto market is at the level of 28 points, which is justified due to the fear of global changes. At this time, the index is at the level of the spring decline, where a reversal occurred.