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Bitcoin (BTC) and other bulls will not benefit from a major change in United States inflation policy in 2023, one analyst says.

In a Twitter thread on Dec. 20, Jim Bianco, head of institutional research firm Bianco Research, said that the Federal Reserve would not “pivot” on rate hikes next year.

Bianco: Japan YCC move "matters for all markets"

In light of the surprise yield curve control (YCC) tweak by the Bank of Japan (BoJ), analysts have become all the more bearish on the prospects for risk assets this week.

As Cointelegraph reported, the move spelled immediate pain for the U.S. dollar, and with the Wall Street open in sight, equities futures were trending down in step at the time of writing.

For Bianco, the fact that the BoJ was now seeking to follow the Fed in tightening policy to ward off inflation meant that the latter was unlikely to loosen its own policy.

BNB (BNB), the native token of the Binance crypto exchange, is under threat of undergoing a significant price correction in the coming weeks, based on a mix of technical and fundamental indicators.

BNB triangle breakdown continues

From a technical perspective, BNB has entered the breakdown stage of its multi-month ascending triangle pattern, a trend continuation indicator. The breakdown could last until the price reaches the level that comes to be at the length equal to the triangle's maximum height.

In other words, BNB's ascending triangle breakdown target is near $170, down about 30% from the current price levels, as shown below. The BNB/USD pair could drop to the said level by January 2023.

For now, BNB's breakdown move appears to be halting near $222, which has served as a strong support level in  recent history, including the declines witnessed in the aftermath of the Terra (LUNA) collapse in May 2022.

BNB could retest the $222 as support, based on a rising wedge technical setup forming on the four-hour chart, as shown below. 

Bitcoin (BTC) recovered from an overnight dip on Dec. 20 as Japan’s central bank sparked chaos on global financial markets.

Analyst likens BoJ policy to FTX

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD returning to near $17,000 after falling over 3% through the course of Dec. 19.

The largest cryptocurrency benefitted from the flash United States dollar weakness, this coming on the back of a surprise policy tweak from the Bank of Japan (BoJ).

Long a deflationary environment with ultra-low interest rates, Japan woke up to a sea change on the day as policymakers lifted the cap on bond yields. The yen instantly gained against the USD, while Japan’s Nikkei plummeted.

Reacting, Bitcoin analysts were anything but jubilant despite the short-term benefits for BTC/USD.

Bitcoin (BTC) broke below $16,800 on Dec. 16, reaching its lowest level in more than two weeks. More importantly, the movement was a complete turnaround from the momentary excitement that had led to i$18,370 peak on Dec. 14.

Curiously, Bitcoin dropped 3.8% in seven days, compared to the S&P 500 Index's 3.5% decline in the same period. So from one side, Bitcoin bulls have some comfort in knowing that correlation played a key role; at the same time, however, it got $206 million of BTC futures contracts liquidated on Dec. 15.

Some troublesome economic data from the auto loan industry has made investors uncomfortable as the rate of defaults from the lowest-income consumers now exceeds 2019 levels. Concerns emerged after the average monthly payment for a new car reached $718, a 26% increase in three years.

Furthermore, the central banks of the United States, England, the European Union and Switzerland increased interest rates by 50 basis points to multiyear peaks — highlighting that borrowing costs would likely continue rising for longer than the market had hoped.

Uncertainty in cryptocurrency markets reemerged after two of the most prominent auditors suddenly dropped their services, leaving exchanges hanging. French auditing firm Mazars Group, which previously worked with exchanges including Binance, KuCoin and Crypto.com, has deleted a section devoted to crypto audits from its website.

Bitcoin (BTC) stayed rigid below $17,000 at the Dec. 19 Wall Street open as skeptical traders feared more downside.

BTC traders call time on upside potential

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD lingering around the $16,700 mark, practically unmoved over the weekend.

The pair saw only fractional volatility at the open, as United States equities fell slightly. At the time of writing, the S&P 500 and Nasdaq Composite Index were down 0.5% and 1%, respectively.

For Bitcoin traders, there was little to celebrate, with consensus forming around the potential for testing lower levels next.

“Bearish as long as it stays below the $19k,” Crypto Poseidon summarized alongside a chart.

Capitulation literally means concede. In the financial sphere, this term reflects a period of aggressive selling when the last of the bulls concede defeat to become bears themselves.

What is crypto market capitulation?

Suppose a cryptocurrency drops 30% overnight. An investor is left with two options: they can continue to hold or sell to realize the losses.

There would be sharp decline in price if most investors decide to realize their losses. In addition, this selling pressure could produce a price bottom as the bears eventually run out of coins to sell. 

But while it's very difficult to predict and identify capitulation, there are a few recurring market signals that can help traders prepare for such an event.

A crypto market capitulation will typically include most of these condition:

Bitcoin (BTC) starts the week before Christmas with a whimper as a tight trading range gives BTC bulls little cheer.

A weekly close just above $16,700 means BTC/USD remains without major volatility amid a lack of overall market direction.

Having seen erratic trading behavior around the latest United States macroeconomic data print, the pair has since returned to an all-too-familiar status quo. What could change it?

That is the question on every analyst’s lips as markets limp into Christmas with little to offer.

The reality is tough for the average Bitcoin hodler — BTC is trading below where it was two years and even five years ago. “FUD” is hardly in short supply thanks to the fallout from FTX and concerns over Binance.

Bitcoin (BTC) only needs one more key on-chain signal for a classic bull market to begin, analyst David Puell says. 

In a tweet on Dec. 17, the Puell Multiple creator argued that the stage is almost set for the end of the BTC price bear market.

Puell: Bitcoin network activity "underwhelming"

Despite many calling for new BTC/USD lows of $12,000 or less this cycle, not everyone is wholly bearish on the outlook for Bitcoin.

For Puell, two essential on-chain phenomena necessary for BTC price recovery are already in evidence.

Long-term holders (LTHs) are resisting the urge to sell despite Bitcoin being down over 70% from its last all-time high.

Crypto markets threw a nice head fake this week by rallying into resistance on a “positive” Consumer Price Index (CPI) report, before retracing the majority of those gains right after Federal Reserve Chair Jerome Powell took on a surprisingly hawkish tone during his post-rate-hike presser. 

The Fed hiked interest rates by 0.50%, which was well within the expectation of most market participants, but the eyebrow-raiser was the Federal Open Market Committee consensus that rates would need to reach the 5%–5.5%+ range in order to hopefully achieve the Fed’s 2% inflation target.

This basically threw cold water on traders’ lusty dreams of a Fed policy pivot taking place in the first half of 2023, and the damper on sentiment was felt throughout crypto and equities markets.

As the charts below show, Bitcoin (BTC) and Ether (ETH) reversed course right as Powell began his presser on Dec. 14.

How do you like them apples?

The total cryptocurrency market capitalization dropped 8.1% in the past two days after failing to break the $880 billion resistance on Dec. 14. 

The rejection did not invalidate the 4-week-long ascending channel, but a weekly close below $825 billion will confirm a shift to the lower band and reduce the support level to $790 billion.

The overall investor sentiment toward the market remains bearish, and year-to-date losses amount to 66%. Despite this, Bitcoin (BTC) price dropped a mere 2% on the week, down to the $16,800 level at 17:00 UTC on Dec. 16.

A far different scenario emerged for altcoins which are being pressured by pending regulation and fears that major exchanges and miners could be insolvent . This explains why the total market capitalization had dropped by 4.7% since Dec. 9.

According to court documents filed on Dec. 15, a United States Trustee announced the committee responsible for part of FTX's bankruptcy proceedings. Among those is Wintermute Asia, a leading market maker and GGC International, an affiliate of the troubled lending platform Genesis. Investors remain in the dark about who the biggest creditors from the failed FTX exchange group are and this is fueling speculation that contagion could continue to spread.

Ether (ETH) price is down on Dec. 16 and the pre-FOMC rally to $1,350 was obliterated after Federal Reserve chair Jerome Powell issued hawkish statements following a 0.50% hike in interest rates.

The Ether sell-off follows a market-wide decline that has sent Ethereum network fees plummeting by 39.90% in the past 30-days.

The total value locked in Ethereum-based smart contracts also decreased by decentralized finance by 4.49% in 24-hours.

Following the FTX exchange scandal, regulators are attempting to fast-track new regulations on the cryptocurrency sector.

While some analysts believe Ethereum still possesses multiple bullish catalysts that warrant investing in the asset, on-chain data paints a grim picture of its short-term price prospects.

Bitcoin (BTC) looked set to ditch $17,000 after the Dec. 16 Wall Street open as United States equities continued to fall.

Analyst: $240BNB "has nothing but air below it"

Data from Cointelegraph Markets Pro and TradingView tracked new intraday lows of $16,743 for BTC/USD on Bitstamp.

The pair had abruptly dived nearly 3% earlier in the day, compounding losses, which immediately followed one-month highs.

Ongoing concerns over largest global exchange Binance pervaded the mood, these coming despite the best efforts of CEO, Changpeng Zhao, to dispel what he called “FUD.” As Cointelegraph reported, longtime crypto traders were similarly skeptical of the credibility of the “craziest rumors” about the crypto exchange sector.

Nonetheless, markets refused to give them a break, and beyond Bitcoin, warnings increased over the fate of Binance’s in-house token, Binance Coin (BNB).

Bitcoin (BTC) fell below $17,000 on Dec. 16 as traders warned of overreaction to “FUD” involving exchange Binance and others.

Binance “FUD” fuels bearish BTC moves

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it put in multi-day lows of $16,928 on Bitstamp.

The pair retraced its entire run to one-month highs courtesy of the latest macroeconomic data and policy update from the United States.

Amid ongoing concerns over the solvency of largest global exchange Binance, market sentiment showed what traders argued was a clear case of cold feet.

The evidence, they suggested, simply did not stack up in bears’ favor.

As the coldest days of the crypto winter set in, investors’ speculative interest in the crypto market has fallen to pre-2021 levels, impairing the chance of a substantial directional price move. However, there’s a possibility of a bear market rally akin to the July through August 2022 uptrend.

The market enters a state of limbo

The FTX implosion impacted over 5 million users globally and adversely affected numerous crypto companies that were exposed to it. The industry is currently in a recovery mode and Cumberland, a U.S.-based crypto market broker, recently echoed this narrative in a tweet. The firm noted that "dozens of crypto companies are either severely curtailed or out of business, and the industry's future is as cloudy as ever."

Data suggests that building a sustainable bullish move will be challenging because the market is pushed back to a low liquidity and volatility regime.

Crypto analytics firm, Glassnode, reported “depressing” futures volumes for Bitcoin and Ethereum, tracing back to pre-2021 levels when Bitcoin’s price surpassed $20,000 for the first time.

The open interest volume of Bitcoin and Ethereum futures has dropped significantly toward mid-2022 levels, which was after the collapse of Luna-UST. The BTC and ETH leverage ratio indicator, which measures the ratio between open interest volume, is currently down to 2.5% and 3.1%.

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.

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.

On Dec. 14, Bitcoin (BTC) price hit a 1-month high and saw a brief resurgence in bullish momentum, but the Federal Reserve’s Federal Open Market Committee (FOMC) hawkish report and comments from Fed chair Jerome Powell sent BTC to an intraday low at $17,659. 

Stocks and Bitcoin started the day slightly up but quickly retracted on the FOMC report. To date, Bitcoin price remains closely correlated to equities and a majority of investors have concerns about the impact of further rate increases in the future.

Rising interest rates and hawkish talk from Powell impact BTC price

While the Consumer Price Index (CPI) report showed easing inflation at 7.1%, Powell still wants to reach 2% overall inflation. Inflation has been a determining factor in raising interest rates and the current 0.5% hike had consensus amongst FOMC participants. The Fed members also agree that rate hikes should continue in 2023.

During the Dec. 14 press conference, Powell stated:

“We may see higher rates for a longer period to achieve the 2% inflation goal”