Bitcoin Faces Potential Downtrend as Market Sentiment Wavers

Bitcoin (BTC) is trending down after hitting one-month highs around the latest macroeconomic data and policy update from the United States.

Having topped out at around $18,370 on Bitstamp on Dec. 14, BTC/USD is now giving back its gains, leading traders to eye where the next reversal may occur.

Opinions differ — some warn that support levels for bulls to hold are already tumbling, while others believe that recent events are just another dot on the path to much lower levels.

Michaël van de Poppe: $17,200 Must Hold for Shot at $20,000

Having called the macro market reaction to the Federal Reserve “relatively boring” this week, Michaël van de Poppe, CEO and founder of trading firm Eight, says support levels are already close for BTC/USD.

With the pair down almost $1,000 from local highs at the time of writing, Van de Poppe eyed $17,200 as a line in the sand for bulls.

After the gains, a higher low (HL) could be on the cards next. To the upside, bulls holding support may yet deliver a Santa rally which includes a trip past the $20,000 mark.

“All in all, we’ll have some consolidation on Bitcoin, seeking for a HL,” he told Twitter followers.

BTC/USD last traded above $20,000 just before the FTX debacle sent the entire crypto market tumbling 25% or more.

Daan Crypto Trades: Market Wants to “Take Out Everyone”

Bitcoin is reaching for liquidity up and down, popular trader and analytics account Daan Crypto Trades says.

Having highlighted $17,600 — Bitcoin’s low from June this year — as an important level for bulls, BTC/USD took a matter of hours to head even lower.

As such, it was clear that both longs and shorts could be punished on short timeframes.

“All jokes aside, the market is out to take out everyone on both sides right now,” Daan wrote in a subsequent tweet.

That untapped liquidity extended to just above $17,000 at the time of writing, while to the upside, $17,750 and up represented sell pressure.

Crypto Tony: $17,300 “Will Get Hit”

Fellow trader Crypto Tony meanwhile said he assumed that $17,300 would make a reappearance on the day.

“Hedge short is doing nicely and stop loss on Bitcoin on my prior long at $17,300 no doubt will get hit today. Only took partial profits on that push, but not a great deal. Not the best trade and not the worse,” he explained to followers.

A further tweet added that BTC/USD needed to see additional buying interest for fresh upside.

BTC/USD traded at around $17,500 at the time of writing, data from Cointelegraph Markets Pro and TradingView showed, just before the start of trading on Wall Street.

Conclusion

The overall sentiment in the market is highly fluctuating, with key levels to hold being crucial for bulls. Traders should keep an eye on market developments and potential volatility as macroeconomic factors continue to influence trade decisions.

The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.