Bitazza Crypto Weekly: Whether Its Inflation or Deflation, Bitcoin Remains Strong -

Crypto Weekly: 13 – 19 December 2021

The US Customer Price Index, which measures the cost of goods and services, including staples like food and gasoline, surged by 6.8% from a year earlier. This marks the fastest growth of inflation in nearly 40 years and underscores the ever-present danger of the assets you own depreciating in value if you’re unable to generate returns that can outpace inflation.

Meanwhile, according to Bloomberg, Bitcoin’s status as a long-term hedge against hyperinflation continues to grow. A report from Bloomberg points out that while the US dollar has seen a 28% increase in inflation since 2011, Bitcoin has been deflationary by 99.94% within the same timeframe. Another way to look at Bitcoin’s performance is by considering that the price of 1 BTC ten years ago would only buy you 0.004 Satoshi today.

Likewise, Bloomberg Intelligence Senior Commodity Strategist Mike McGlone is bullish on the outlook for Bitcoin in 2022, stating that he sees “deflationary forces” prevailing next year and taking digital assets to new heights. McGlone gave a tentative price prediction of $100,000 for BTC in 2022 and also outlined a possible deflationary course for the economy citing similarities between crude oil prices now compared to prices in 2008.

Both reports by Bloomberg reflect the growing consensus that Bitcoin is becoming a reliable investment asset, regardless of whether the global economy is inflationary or deflationary.

Business-intelligence software company MicroStrategy has announced that it has purchased an additional 1,434 Bitcoin between November 29 and December 8. According to the statement, the company paid approximately $82.4 million for the BTC at an average price of $57,477 per Bitcoin. At the time of writing, MicroStrategy holds about 122,478 BTC in their treasury valued at around $6 billion, purchased at an average price of $29,861 per BTC.

Binance is reportedly in talks with the family behind one of Indonesia’s largest banks and telecom firms, PT Bank Central Asia and PT Telkom Indonesia respectively, regarding a partnership and acquiring the necessary licenses to operate in the world’s fourth most populous country. This would help expand Binance’s footprint in the APAC region while providing them access to Malaysia’s growing Crypto scene.

Finally, the Meta-owned cross-platform instant messaging service provider WhatsApp has launched their Crypto payments pilot program in the US. A limited number of users will be able to use Novi, Meta’s digital wallet, to make payments using Pax Dollars (USDP). Meta will be relying on Coinbase as its custody partner to power its Crypto program.

Weekly Technical Analysis: 13 – 19 December 2021

Bitcoin (BTC)

BTC’s trend remains unclear, with the market leader unable to create new highs or new lows. The key support is still at $42,000 and will have to remain intact if BTC hopes to rally. BTC will have to break through resistance at $52,000 to confirm recovery. If traders are uncomfortable with uncertainty, you should wait until the trend is clearer before entering a position.

Ethereum (ETH)

ETH continues to trend sideways like BTC, and it is uncertain whether ETH will rally or enter a downtrend coming out. Support is set at $3,900 this week, and ETH will look to test resistance at the $4,500 level.

Gala Games (GALA)

GALA is up by 15.2% since last week and is beginning to reverse into an uptrend this week. GALA will look to challenge resistance at 22 Baht. Traders looking to enter a GALA position should treat the 15 Baht support level as a buy point. If support remains intact, GALA’s rally should continue.

Avalanche (AVAX)

AVAX is up by 4.1% since last week. Despite its trend still looking bearish, AVAX is beginning to show signs of an upwards reversal. If the support level at 2,600 Baht can remain intact and resistance at 3,300 Baht is successfully challenged, look for AVAX to enter an uptrend.

Trading and Investment Considerations For The Week

Keep a close eye on any news coming out of the Federal Open Market Committee (FOMC) meeting this week on December 15-16. With inflation surging to an almost-40 year high, it remains to be seen what monetary policy the FOMC may enact to address these concerns.

Financial markets may respond negatively if the FOMC announces an accelerated timeline to taper its QE program or look to raise interest rates even further. This could potentially include the digital asset market, particularly in the short or medium term.

Meanwhile, the US Senate’s Banking, Housing, and Urban Affairs Committee will be holding a hearing on December 14 focused on the usage and risks of stablecoins. The hearing will hopefully provide greater clarity and transparency regarding the issuance of fiat-backed stablecoins, as fears regarding heightened regulatory measures towards stablecoins could have a negative impact on the Crypto market.

Those with funds in reserve are advised to wait for these two important meetings to conclude before investing any further. Depending on the news coming out, there’s always a chance that Bitcoin and the rest of the market will continue to fall; therefore, traders are advised to minimize risks and wait for the trend to be clearer before entering a position. In contrast, if the market begins to recover, there will be plenty of opportunities to make a profit.

Considering that fears regarding the spread of the new Omicron variant have largely subsided, the short-term trend of the Crypto market is anticipated to be much clearer to anticipate following the conclusion of the aforementioned meetings. Traders and investors are advised to see what the trend is looking like and determine their strategy accordingly.

*Materials on Bitazza Weekly Newsletter are intended to be used and must be used for informational purposes only. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of Bitazza and its employees. The information contained herein is not intended to be a source of advice or financial analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.

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