After recording a drop of up to -10% last week, Bitcoin regained momentum, reaching $47,000. Let’s take a look at the future outlook for the BTC price.
Status of Bitcoin (BTC)
After reaching a new high of $45,900 in the first days of the year, the price of Bitcoin suffered a rapid decline, close to 10%. It fell from $45,100 to $40,600 in just two hours. Although this drop took Bitcoin below its previous high of $45,000, raising concerns among investors in the cryptocurrency market, the medium to long-term trend of Bitcoin still remains to be upwards.
After making a new low point, Bitcoin experienced an increase. This was stimulated by a renewed interest from buyers. This period was marked by a consolidation of prices in the form of a symmetrical triangle. The latter was broken higher, theoretically suggesting the continuation of the uptrend. A scenario which has indeed been confirmed. Indeed, Bitcoin has not only recovered its recent losses, but has also surpassed them.
This morning, the price of BTC is trading around $47,000. It is holding above its 50-day and 200-day moving averages. This reinforces the idea that Bitcoin is still in an uptrend in the medium term. As for the oscillators, we observe that they remain above the median threshold. This reflects bullish momentum. However, a bearish divergence of the latter with the price of BTC suggests a period of consolidation or decline to come.
The current technical analysis was carried out in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today trainer at Family Tradinga community of thousands of own-account traders active since 2017. You will find Lives, educational content and mutual assistance around the financial markets in a professional and warm atmosphere.
Focus on derivatives (BTCUSDT)
When Bitcoin fell below $45,000, its open interest decreased by around 20%. This represents the removal of nearly $1.7 billion in positions (long and/or short) on Bitcoin contracts. This decline, accompanied by approximately $35 million in buyer liquidations. Thus, this event reflects increased volatility and downward pressure in the cryptocurrency market.
However, after a brief consolidation in Bitcoin, the leading cryptocurrency saw an increase in open interest. Indeed, from $43,500, more than $850 million was added to Bitcoin. Given the upward trend that BTC has taken, we can deduce that a majority of these positions were long. This assertion is all the more reinforced by the fact that the significant liquidations of short positions did not have a notable impact on open interest.
Currently, open interest is showing a slight decrease, which could indicate a lack of conviction on the part of traders or profit taking. This trend suggests a period of reassessment or adjustment of market positions.
The BTC/USD liquidation heat map indicates that Bitcoin has crossed a high liquidity zone. The latter is located between $44,500 and $46,360. So far, demand appears to exceed supply. This supports the hypothesis that the upward movement is probably not over. However, a correction to test the interest of this zone cannot be ruled out.
It is important to note that the $43,000 and $42,000 levels appear to remain important liquidation zones. Additionally, with BTC having stagnated around $47,000, a subtle liquidation zone has formed above this price. As the market approaches these levels, it could trigger a large number of orders and therefore increase the volatility of the cryptocurrency. These areas are therefore potentially attractive for investors.
Hypotheses for the price of Bitcoin (BTC)
If the price of Bitcoin manages to stay above $45,000, we could anticipate an increase to the threshold of $48,000. The next resistance to take into account, if the bullish movement continues, would be $50,000 or $52,000. At this stage, this would represent an increase close to +10%.
If the price of Bitcoin fails to stay above $45,000, we could envisage a return to $43,500. The next level to take into account, if the bearish movement continues, would be around $42,000 or even $40,000. At this stage, this would represent a drop close to – 14%.
Conclusion
Bitcoin enters 2024 with notable volatility, driven in part by excitement over the SEC’s highly anticipated ruling on Bitcoin spot ETFs. On this subject, the question arises: should we sell the news? What is certain is that it will be crucial to carefully observe the price reaction at the different key levels to confirm or refute the current hypotheses. It is also important to remain vigilant against potential “fake outs” and “market squeezes” in each scenario. Finally, let us remember that these analyzes are based solely on technical criteria and that the price of cryptocurrencies can also evolve quickly depending on other more fundamental factors.
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
