Bitcoin’s price might drop to $34,000, facing additional selling pressure, and could remain stagnant at that level for a period before initiating the next upward trend.
Bitcoin, the biggest cryptocurrency, faced significant selling pressure as its price plummeted to $40,000 today. This occurred due to substantial outflows from the Grayscale Bitcoin Trust (GBTC), which shifted towards the recently introduced Bitcoin ETFs.
Bitcoin Price Analysis and Sentiment Shift
Renowned crypto analyst Ali Martinez notes Bitcoin’s price adhering to a parallel channel, facing resistance at the upper boundary of $48,000. Martinez predicts a retracement to $34,000, followed by a rebound targeting the upper boundary at $57,000. This insight provides a view of potential price movements within the established channel.
Courtesy: Ali Martinez
Meanwhile, Santiment, an on-chain data provider, reports continued trader optimism after the approval of 11 Spot Bitcoin ETFs by the SEC on January 10th. However, a sentiment shift is observed, hinting that Fear of Missing Out (FOMO) surrounding the approvals may have led to a local market top.
Courtesy: Santiment
Experts suggest that anticipated approvals were already factored into market prices, contributing to a subsequent Bitcoin value decline to $40.6K, a 16.9% decrease from the previous week’s peak. Santiment is monitoring whether negative sentiment emerges, using words like “scam” or “disaster” associated with the approved ETFs. A shift to bearish sentiment might lead to Fear, Uncertainty, and Doubt (FUD), triggering selloffs from novice traders.
On-chain Analysis Points to Potential Bitcoin Correction
In a recent analysis, On-chain College suggests the possibility of a multi-month correction or stagnation for Bitcoin’s price. Contrary to signaling a bear market, the analysis proposes that such a trend could strengthen the market by transitioning coins to more robust hands, potentially paving the way for a robust future bull run.
Courtesy: On-chain College
Amid current market conditions, focus remains on Bitcoin’s short-term cost basis, currently positioned at $37.8K. Historically, this level has functioned as both a support level during bull markets and a resistance level during bear markets, lending significance to its role in shaping market dynamics. On-chain College’s insights provide a nuanced perspective on potential Bitcoin price trajectories, recognizing the historical impact of key price levels in influencing market trends.
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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