Bitcoin still has good signals for next year.

The cryptocurrency market has begun to cool down again after Bitcoin surged more than twice its value this year, touching a 20-month high at around $44,500 US dollars. This surge was fueled by decreasing inflation figures worldwide.

Technical analysis suggests that Bitcoin faces resistance around $44,600 US dollars and might find support near $40,600 US dollars if a downward trend begins. Additionally, the Fear and Greed Index indicates a highly greedy sentiment among investors, currently sitting at a high greed level of 80.

The cryptocurrency market continues to benefit from decreasing inflation over recent months. Moreover, there's an anticipation of sustained inflation rates in the future, prompting central banks worldwide to maintain interest rates and begin relaxing monetary policies next year, making risk assets more appealing. Additionally, there's an expectation that the United States Securities and Exchange Commission (SEC) might approve the establishment of Bitcoin ETFs next year.

Yuya Hasegawa, a cryptocurrency market analyst at Bitbank, a digital currency exchange company in Japan, mentioned, "The approval of Bitcoin ETFs by the SEC would immediately recalibrate Bitcoin's price as the market has already priced in expectations. Long-term, Bitcoin ETFs could generate billions of dollars in revenue annually for the cryptocurrency market and would be a good starting point if other ETFs are established in the future."

Moreover, Bitcoin has received momentum from the upcoming Halving event scheduled for April, which is expected to positively impact the cryptocurrency market next year. Halving refers to the reduction in Bitcoin's issuance per block, which historically has led to price increases. Some analysts speculate that this Halving event could potentially drive Bitcoin's price up to $500,000 US dollars.

James Butterfill, Head of Research at CoinShares, a digital asset management firm, commented on Bitcoin's future price, saying, "Several factors influence future prices. Currently, what's contributing to the Bitcoin bubble is the rising interest rates over the past few months, and what might further stimulate price growth is a reduction in interest rates next year."

Regarding the Fed's policy setters, signals suggest that interest rates won't decrease shortly due to robust job hiring data released on Fridays, indicating that the market's expectations for early-year rate cuts might be too optimistic.

Techical analysis data (5H)

Resistance: 42225.6, 42489.3, 42897.6

Support: 41553.6, 41145.3, 40881.6

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 41145.3 - 41553.6 but cannot break the support at 41553.6, you may set a TP at approximately 42489.3 and SL at around 40881.6 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 42225.6 - 42489.3, you may set a TP at approximately 42897.6 and SL at around 41145.3 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 42225.6 - 42489.3 but cannot break the resistance at 42225.6, you may set a TP at approximately 41145.3 and SL at around 42897.6 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 41145.3 - 41553.6, you may set a TP at approximately 40881.6 and SL at around 42489.3 or according to your acceptable risk.