Bitcoin (BTC) is likely to end 2022 well below analysts' target projections of $100,000. Kraken CEO Jesse Powell, who had besides projected a $100,000 price target for Bitcoin, still remains bullish in the long term, only he does not rule out a sharp drop in the short term.

One of the negatives that may add pressure to Bitcoin in the brusque term is the shift in the United states of america Federal Reserve's monetary policy. On Dec. fifteen, the Fed announced that information technology would wind down its bond-buying program at a faster footstep, and it as well projected three involvement rate hikes in 2022.

Crypto market data daily view. Source: Coin360

Sam Stovall, main investment strategist of CFRA Research, told CNBC that historically, the S&P 500 tends to post negative returns in the 12-month menstruation when the Fed undertakes iii or more than rate increases.

If history repeats, Bitcoin could also struggle to run abroad due to its strong correlation with the Due south&P 500 at various stages in 2022. It is difficult to predict with certainty whether investors volition proceed to buy Bitcoin to hedge their portfolio confronting rising aggrandizement if a risk-off sentiment will issue in profit-booking.

With this incertitude, let's turn to the charts and deport a long-term Bitcoin analysis to decide the critical levels to watch out for.

BTC/USD

Bitcoin'south precipitous rally in 2022 pushed the relative strength index (RSI) higher up 96, indicating a country of euphoria among traders. Vertical rallies are rarely sustainable and are commonly followed by a abrupt correction or a menstruum of consolidation. That is what happened after the bull motility ended in 2022.

BTC/USD monthly chart. Source: TradingView

The BTC/USD pair remained stuck below the December 2022 highs until the breakout above $twenty,000 in December 2022. This shows a large base of operations-building period of about three years.

The pair's sharp rally in 2022 propelled the RSI above 91 in March before profit-booking set in. Nonetheless, unlike 2022, bulls aggressively defended the 20-month exponential moving average ($37,281).

This suggests that sentiment remained positive and traders were using the dips to accumulate. The subsequent rally drove the pair to a new all-time loftier at $69,000, merely bulls could not sustain the higher levels. This shows that traders are booking profits on rallies.

The sharp correction has once again pulled the price toward the 20-month exponential moving average (EMA) and the RSI is exhibiting signs of a negative divergence, indicating that the bullish momentum may be weakening.

If bears sink and sustain the price beneath the 20-month EMA, the pair could drop to the critical back up at $28,800. This is an important level for the bulls to defend because a break below information technology could result in a long period of base-edifice.

On the other mitt, if the price rises from the electric current level, the pair could retest $69,000. A break and shut above this resistance could betoken the resumption of the uptrend.

BTC/USD weekly nautical chart. Source: TradingView

The bulls pushed the price above the $64,899 level on ii occasions simply could not sustain the higher levels. This could have trapped the aggressive bulls who purchased the breakout, resulting in a long liquidation.

The twenty-week EMA ($52,016) has started to turn down gradually, and the RSI has dipped into the negative zone, suggesting that bears are attempting a improvement. The bulls attempted to defend the 50-calendar week simple moving average (SMA) ($47,709) but could not drive the price above the 20-calendar week EMA.

This could have attracted further selling, and the bears are now trying to sink the price to the side by side strong support at $39,600. This is an important level for the bulls to defend considering if information technology cracks, the pair could plummet to $28,732.

Such a move could filibuster the start of the next leg of the uptrend and may keep the pair stuck in a range betwixt $28,732 on the downside and $69,000 on the upside.

On the opposite, if the price turns up from the electric current level and breaks above the 20-week EMA, bulls will make one more try to articulate the $64,899–$69,000 overhead resistance zone.

If they succeed, the bullish momentum could pick up, and the pair could get-go its due north journey toward the $100,000–$109,000 price zone where the rally may face strong headwinds.

Alternatively, a interruption and close beneath $28,732 could result in a bear market place with the next stiff back up at $20,000.

Related: Bitcoin tests yearly moving boilerplate as $100K by Christmas needs 'small miracle'

BTC/USD daily nautical chart. Source: TradingView

The pair has been declining inside a descending channel for the past week. Both moving averages are sloping down and the RSI is in the negative zone, indicating that bears are in control.

If the price turns down from the current level or the xx-mean solar day EMA ($fifty,054), it will suggest that sentiment remains surly and traders are selling on rallies. That could pull the price to the Dec. 4 intraday low at $42,333.

This is an important level for bulls to defend because if it cracks, bears will attempt to sink the price beneath the support line of the aqueduct. If they manage to do that, the selling could intensify further.

The zone between $39,600 and $37,300 may act as potent support, but if bulls fail to push the price above the xx-day EMA, the pass up may extend to $28,800.

Conversely, if the price rises and breaks higher up the resistance line of the channel, it volition signal that the selling force per unit area could be reducing. The pair could and so rise to the 50-day SMA ($56,524), which may again pose a stiff claiming.

The bulls will have to push button and sustain the price above the fifty-24-hour interval SMA to signal the showtime of an upward-movement to $60,000. This level may act every bit a potent resistance, but if crossed, the rally could retest the all-time high.

The views and opinions expressed here are solely those of the author and do non necessarily reflect the views of Cointelegraph. Every investment and trading move involves gamble, you should comport your own research when making a determination.