Bitcoin’s price remained stuck in a narrow range as a series of macroeconomic factors kept market activity constrained.
The total crypto market cap edged slightly lower, with buying and selling pressure both subdued during a week filled with key macro developments.
As of press time, overall market capitalisation hovered just above the $3 trillion mark.
Risk appetite remained weak, reflected in the crypto fear and greed index, which flashed a reading of “extreme fear” at 16 during late Asian trading hours on Wednesday.
Altcoins were similarly affected, with uncertainty weighing on broader sentiment. Gains were mostly limited to a few low-cap tokens while the rest of the market waited for a clearer direction.
Why is Bitcoin price stuck?
Bitcoin traded within a tight range between $86,282 and $87,918 as traders braced for two high-stakes macro events, Japan’s imminent rate decision and confusing US economic signals, both of which have kept risk flows sidelined and volatility artificially compressed.
The primary weight on price action stems from Japan, where markets are almost certain the Bank of Japan will hike rates to 0.75% at its upcoming December 19 policy meeting.
The fear is not the hike itself, but what it might trigger, a reversal of the yen carry trade.
This mechanism, long used by investors to borrow cheap yen and buy higher-yielding risk assets like Bitcoin, becomes unstable when rates rise.
In past BoJ hikes this year, Bitcoin dropped as much as 30% as leveraged positions were unwound to repay yen loans.
Traders are now front-running that potential fallout, selling ahead of the decision rather than risk being caught on the wrong side of a rapid unwind.
Adding to the pressure, delayed US labor data released Tuesday offered little clarity.
A rise in unemployment to 4.6% pointed to a weakening economy, while stronger-than-expected job growth created doubts over how aggressively the Federal Reserve might act to cushion the slowdown.
This contradictory signal was enough to sap investor confidence, leading to nearly $600 million in combined Bitcoin ETF outflows across Monday and Tuesday as institutions shifted to the sidelines.
The market is currently characterized by indecision, leaving Bitcoin stuck in a tight trading range without the clear conviction for a significant directional move.
This hesitation is clearly reflected in the recent liquidation data.
Over the last 24 hours, approximately $152 million in leveraged positions were liquidated, with the losses almost perfectly balanced between those betting on a rise (longs: $77.75M) and those betting on a fall (shorts: $74.60M).
Crypto market 24 hour liquidation as of Wednesday, 3:00 pm GMT. Source: Coinglass.
During such a pre-event deleveraging environment, the market punishes both sides equally.
Short-sellers are enticed during minor price dips, only to be forcefully liquidated when the price recovers.
Conversely, long position traders, who anticipate a breakout, are often stopped out on subsequent pullbacks.
Will Bitcoin price go down?
According to CryptoQuant, an on-chain data provider, Bitcoin is nearing a key level as it has dropped toward its True Market Mean (TMM), currently $81,500, and found support there.
See below.
Bitcoin True Market Mean. Source: CryptoQuant.
The TMM, or Active-Investor Price, represents the collective cost basis of all non-dormant coins, excluding miners. Per CryptoQuant analysts, this level acts as a “psychological line in the sand.”
When BTC is above it, investors are comfortable, but losing this support often causes the level to flip into resistance. In that scenario, those who bought near the average cost tend to “use rallies to exit.”
The analyst cautioned that a “failure to hold the $81.5K level will likely result in a sharp break below, followed by a search for support in the coming months.”
Meanwhile, on X, Trader and analyst Daan Crypto Trades suggests the BTC/USD pair will continue with “ranging with a choppy price action” until either the major support zone of $84,000-$85,000 is lost or the “big resistance” at $94,000 is broken.
BTC/USD 1-Day price chart. Source: Daan Crypto Trades on X.
Fellow analyst Michaël van de Poppe came in with a bullish take, noting that if Bitcoin price manages to break past $88k, it could translate into a rally towards $94,000 which is the next major resistance level.
BTC/USD 4-hour price chart. Source: Michaël van de Poppe on X.
At press time, Bitcoin had breached past $88k and was hovering just below $90k.
Top altcoin gainers
The altcoin market cap rose 6.4% over the day from $1.24 trillion to $1.32 trillion at press time.
Ethereum (ETH), the largest altcoin by market cap, traded sideways between $2,900-$3,000 and settled at $2,928 when writing.
Other major cryptocurrencies, such as BNB (BNB), Solana (SOL), Dogecoin (DOGE), and Cardano (ADA), were down slightly, dropping between 0.5-1%
Out of the top 100 leading cryptocurrencies, Midnight (NIGHT) led the gainers with double-digit gains of nearly 20% after crypto exchange Kraken listed the token.
Morpho followed with gains of 9.3% following its integration with World Chain to power yield markets for EURC, Circle’s MiCA-compliant euro stablecoin, while Sky (SKY) held on to a 4% increase, supported by an aggressive ongoing buyback strategy.
Source: CoinMarketCap
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