The situation for Bitcoin is not looking great as the price falls below the 20-day Exponential Moving Average (EMA), indicating a potential for more bearish trends in January.
Bitcoin’s price has been hovering around $42,500, with investors eagerly anticipating the debut of the first spot Bitcoin ETF in the United States. A report from last week indicates that approval from the U.S. SEC is expected to come through this week.
Bitcoin Analysis: Retracement Expectations and Historical Patterns
Following an impressive 160% surge in 2023, analysts anticipate potential retracement in the BTC price shortly after the introduction of the Bitcoin ETF. There’s speculation that Bitcoin might enter a phase of sideways consolidation leading up to the scheduled Bitcoin halving in April 2024.
Renowned investor and crypto analyst Rekt Capital provides insights into Bitcoin’s recent monthly close, emphasizing critical support levels and historical trends. Notably, Rekt Capital highlights the historical tendency for Bitcoin to undergo volatile retests when hovering around the $41,000 support level, often resulting in downside wicks extending to approximately $37,000.
Drawing from historical data, Rekt Capital suggests that a potential dip to the $37,000 level could be viewed as a healthy retracement. The analyst points out that similar price movements have occurred in the past, contributing to the overall market health of the cryptocurrency.
New Monthly Close is in
The last two times Bitcoin retested ~$41000 (blue) as support, price produced volatile retests
The retests saw downside wicks go to as low as the ~$37000 region
— Rekt Capital (@rektcapital) January 1, 2024
Furthermore, Rekt Capital underscores that, with just over 100 days until the Bitcoin Halving, deeper retracements in the pre-halving period might present attractive buying opportunities for investors. As the market dynamics continue to unfold, traders and investors are closely observing these crucial support levels and historical patterns for potential insights into Bitcoin’s future price movements.
Courtesy: Rekt Capital
Bitcoin Market Analysis: Options Data and Bearish Signals
Bitcoin options data for January 12 indicates recent weakness, with analysts expressing concerns about limited upside potential even in the event of an ETF approval rally.
The present state of the Bitcoin market is characterized by lower highs and lows, suggesting growing strength among bears, as outlined in a recent analysis. Notably, the previous peak, surpassing $44,800, is yet to undergo a retest, further reinforcing the prevailing bearish sentiment.
A closer look at the chart highlights that Bitcoin’s price has recently dipped below the daily EMA-20, positioned at $42,542. This level, not breached in the past couple of months following a multi-month high, indicates a notable shift. The upswing in bearish volume, reaching a 2-day peak and recording the highest levels since April, raises concerns about a potential correction on the horizon.
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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