Bitcoin has retreated from its overnight rise to $94,000, falling back to $92,000 during Thursday’s U.S. trading hours. This continues the erratic, rangebound performance after earlier fluctuations this week.
Ethereum’s ether remained relatively stable, decreasing by only 0.7% on the day and trading above $3,100 in the afternoon. Among altcoins, , Hedera (HBAR), and privacy-focused Zcash experienced 4%–5% losses, while the broader CoinDesk 20 Index dropped by 2%.
Unstable trading expected
Despite the recent drop, BTC remains significantly above the support level around $85,000 established earlier in the week, indicating that markets may be finding a holding pattern as liquidity decreases towards the end of the year, explains Paul Howard, senior director of trading firm Wincent.
“We consistently observe that cryptocurrency prices are closely aligned with global macroeconomic developments,” said Paul Howard, senior director at Wincent. “While December typically sees lower liquidity, we have noticed a firmer floor around the $85,000 mark during the past week.”
Without major new macroeconomic news, Howard anticipates continued rangebound trading between $85,000 and $95,000 through the rest of the month. “There is potential for altcoins to perform better, particularly in low-liquidity, high-volatility conditions,” he noted.
Attention on Japan
On the macroeconomics front, markets are approaching December with a focus on the U.S. Federal Reserve and notably, the Bank of Japan (BoJ).
Mark Connors, founder and chief macro strategist of bitcoin investment advisory Risk Dimensions, stated that the BoJ’s interest rate decision is the “key event” this month, as it will affect the future of the yen-funded carry trade, which involves borrowing in yen to invest in higher-yielding assets.
If the BoJ maintains current rates, as Connors predicts, it could spur renewed interest in risk assets and provide favorable conditions for equities, bitcoin, and gold.
