Bitcoin price takes a step back as Christmas rally stalls

Bitcoin (BTC) was on the back foot yesterday as cryptocurrencies came under pressure from profit-taking as the Christmas rally ended. BTC bulls refrained from making new highs and had to look below $50,000 for some support. As the price action opened below the 200-day Simple Moving Average (SMA), expect bears to seize the opportunity for another leg lower towards $44,088.

Bitcoin to hold $50,000 going into New Year looks almost impossible

Bitcoin is not enjoying its last few days of 2021 as the Christmas rally came to a halt and, in one trading day, almost wiped out all the built-up gains of that same rally. As price action opened below the vital 200-day SMA, a close below $47,918 would be seen as a very bearish signal and would spell more downside to come with just two more trading days for 2021. Reclaiming the $50,000 is still possible, but time is ticking away.

BTC price will see more bears coming in and push prices against $47,065, with a break to the downside as a result. Bulls will want to back off and leave bears to run their course as thin liquidity will enlarge and exacerbate the trend and reach $44,088. Once there, the nosedive should be halted with the S2 monthly pivot and the historical support that also caught the falling knife price action on December 04.

BTC/USD daily chart

With this thin liquidity, a trend could be easily reversed, which would see bulls pairing back their losses from the previous day with a test back toward $ 52,000, punching back through the $50,000 marker. As most investors are waiting for 2022 to start, some will want to preposition for the many bullish outlooks and forecasts that have projected Bitcoin a bright future in 2022. That additional attention and investor inflow would bring BTC back towards $55,350 by the end of 2021.