Bitcoin (BTC) Falls to Monthly Low After Rejection at Critical Resistance, Further Decline Ahead?

Bitcoin’s price action turned bearish after its brief rally above $18k, forcing its price to a 3-week low.

A frustrated man sitting on a giant Bitcoin BTC in rain with lightning

After its brief rally above $18,000, Bitcoin (BTC) has been on a downtrend along with equities, dropping under $16,400, its lowest level in the last three weeks, and it could face high volatility and low liquidity into year-end. 

Bitcoin Drops to Monthly Low

Following its rally above $18k, Bitcoin’s price action quickly turned to an impulsive decline after experiencing a significant rejection at the resistance level. The decline from the rejection was worsened by significant events.

The Bitcoin price chart between the 16th and 19th

The Bitcoin price chart between the 16th and 19th. Source: CoinMarketCap

Bitcoin’s sharp decline comes amidst the fourth straight daily decline for the S&P 500 and nervousness about the Federal Reserve’s potential rate-hike path, which has been hinted to continue throughout 2023.

High Volatility and Low liquidity to End the Year – More Decline for BTC?

According to a Bitfinex analysis, Bitcoin could suffer more decline as the year winds down given the “declines in trading volume and liquidity,” which could cause the volatility of the asset to spike.

Given the current trend and possible volatility, analysts predict that Bitcoin could face up to a 20% decline. Katie Stockton, founder of Fairlead Strategies LLC, has predicted that BTC could retest November lows, dropping “near $15,600, in the coming weeks.”

On the Flipside

  • Bitcoin is already showing signs of breaking out of the bearish pattern, wiping out the losses of December 19th to trade as high as $16,808.
The 24 hours price chart for Bitcoin (BTC).

The 24-hours price chart for Bitcoin (BTC). Source: CoinMarketCap

Why You Should Care

Read our Bitcoin prediction for 2023 below:
Bitcoin: the Digital Gold – Positives for 2023

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The next Bitcoin rally? Here’s what Soloway thinks:
Gareth Soloway: Regulation Is Key to Triggering Bitcoin’s Next Move Up in 2023

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia