Decentral Block Post

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.

Cointelegraph takes a look at what some popular commentators are looking next for when it comes to short-term BTC price action.

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.

Mike Belshe, the CEO of digital asset custodian BitGo has confirmed that Alameda Research attempted to redeem 3,000 Wrapped Bitcoin (wBTC) in the days before FTX’s bankruptcy filing on Nov. 11. 

During a Dec. 14 Twitter Spaces hosted by decentralized finance (DeFi) researcher Chris Blec, Belshe confirmed the firm knocked back the redemption request because the unknown Alameda representative involved didn’t pass Bitgo’s security verification process and seemed unfamiliar with how the wrapped-Bitcoin burning process worked.

“[The security details] didn't match the process. So we held it up and we said no, no, no, no. This is not what the burn looks like. And we need to know who this person was.”

“So we held it and while we were holding it, waiting for a response on those issues [Alameda] went bankrupt and of course, once they went bankrupt, everything halted,” Belshe added.

The Bitgo CEO also said that Alameda’s 3,000 BTC mint request remains “stuck” on the platform’s dashboard and added that the firm would most likely leave the tokens where they are until they’re dealt with by the trustees taking on Alameda's bankruptcy case.

On Dec. 14, Bitcoin (BTC) broke above $18,000 for the first time in 34 days, marking a 16.5% gain from the $15,500 low on Nov. 21. The move followed a 3% gain in the S&P 500 futures in 3 days, which reclaimed the critical 4,000 points support. 

While BTC price started the day in favor of bulls, investors anxiously awaited the U.S. Federal Reserve Committee's decision on interest rates, along with Fed chair Jerome Powell's remarks. The subsequent 0.50% hike and Powell’s explanation of why the Fed would stay the course of its current policy gave investors good reason to doubt that BTC price will hold its current gains leading into the $370 million options expiry on Dec. 16.

Analysts and traders expect some form of softening in the macroeconomic tightening movement. For those unfamiliar, the Federal Reserve has previously increased its balance sheet from $4.16 trillion in February 2020 to a staggering $8.9 trillion in February 2022.

Since that peak, the monetary authority has been trying to unload debt instruments and exchange-traded funds (ETFs), a process known as tapering. However, the previous five months resulted in less than $360 billion of assets decline.

Until there's a clearer guide on the economic policies of the world's largest economy, Bitcoin traders are likely to remain skeptical of a sustained price movement, regardless of the direction.