Bitcoin’s price plummeted to $38,600, marking its lowest point since early December, fueled by diminishing enthusiasm surrounding the newly launched spot Bitcoin Exchange-Traded Funds (ETFs).
In the last 24 hours, the leading cryptocurrency witnessed a 5.4% drop, reflecting a weekly decrease of over 9% and a monthly decline exceeding 10%. The approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission on January 10 triggered profit-taking and a subsequent “sell-the-news” reaction in the market, contributing to the accelerated decline.
Bitcoin Price Analysis: Historical Patterns and Fibonacci Levels
In a recent tweet, prominent analyst Ali Chart delves into historical patterns in Bitcoin’s price movements, emphasizing a notable correlation with Fibonacci retracement levels.
Reflecting on the last two bull cycles, $BTC typically retraced to the 50% Fibonacci level after hitting the 78.6% Fib.
Recently, #Bitcoin reached this 78.6% Fib level again, suggesting a potential correction. If this pattern holds true, we could see #BTC drop to $32,700,… pic.twitter.com/AArR9adJbC
— Ali (@ali_charts) January 23, 2024
Reflecting on the behavior observed in the last two bull cycles, Ali Chart highlights a consistent trend where Bitcoin tends to retrace to the 50% Fibonacci level after reaching the 78.6% Fib. In the current scenario, Bitcoin appears to be approaching the 78.6% Fibonacci retracement level, signaling a potential correction in the market.
Predicted Correction Level: Drawing insights from historical patterns, Ali Chart suggests that if the trend holds, Bitcoin could undergo a drop to $32,700, aligning with the 50% Fibonacci retracement level. These observations provide a framework for anticipating potential correction levels based on historical performance.
Cryptocurrency Market Correction and Pressures: Impact and Prospects
The cryptocurrency market is currently undergoing a correction, attributed in part to the outflows from Grayscale’s Bitcoin Trust (GBTC). According to a recent JPMorgan report, this trend is anticipated to exert additional pressure on Bitcoin prices in the coming weeks.
Further complicating the situation, cryptocurrency exchange FTX has sold a substantial $1 billion worth of GBTC shares, adding to the selling pressure in the market.
Adding to the complexity, investors are not anticipating a reduction in interest rates by the US Federal Reserve in the near future. The absence of immediate signals for interest rate cuts might be prompting investors to exercise caution in allocating funds to riskier assets, including cryptocurrencies.
Despite these challenges, a glimmer of hope emerges with the upcoming Bitcoin halving event scheduled for April. This event holds the potential to provide some support to the current market scenario, offering a positive aspect amid the prevailing uncertainties.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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