Crypto Market Outlook: Nearing A Make Or Break Moment

After what has been a torrid few weeks for crypto and traditional risk assets alike, we are beginning to enter what could be an important make or break point in time for crypto markets. Whilst the euphoric sentiment towards Bitcoin has been largely washed out amid this pullback and on-chain data is beginning to appear more favourable, we are nearing some very important key technical levels for both Bitcoin and Ethereum. Furthermore, the apparent slowing economy is unlikely to bode well for risk assets in 2022, especially crypto, and thus represents the big headwind facing the market for the foreseeable future. Though we could see positive price appreciation within the early months of 2022, for those betting on $100k bitcoin and $20k Ethereum in December 2021, it is time to reign in your expectations.

After what proved to be a false breakout attempt to new all-time highs in early November, BTC now lies right at the confluence of the 50-period moving average on the weekly chart and the ascending trendline that has held up well thus far since the March 2020 lows.

This 50-period moving average on the weekly chart (blue line above) has been an incredibly important resistance level throughout 2022, and if broken, could see BTC retrace back down to the $30k level in short order, an area that appears to be the lower resistance level in what has been a large consolidation range.

On the daily chart, the 200-day moving average is the key area to watch. Should this level continue to hold, we could potentially see the psychological $50k level retaken and presage a nice bounce into January, though if the 200-day moving average does not hold, a further flush to the $40k-42k seems likely.