BTC Price Stumbles as Bulls Face Resistance

Bitcoin Order Book Thickens Near $40,000 as BTC Price Rebounds Strongly Just Below $44,000.

Bitcoin price drops by $1.5K as analysts monitor support levels.

BTC/USD 1-hour chart. Source: TradingView

Bitcoin (BTC) experienced a significant drop in price on December 28, dampening the post-Christmas rally for bulls. The decline amounted to a $1,500 comedown compared to the daily open, highlighting the challenges faced by the cryptocurrency’s upward momentum. Bitcoin has been stuck in a stubborn range for over a week, primarily due to profit-taking and high funding rates that have raised concerns among analysts.

Resistance and Bid Liquidity

Analysts have been observing the order book dynamics to gauge the market sentiment. Maartunn, a contributor to the on-chain analytics platform CryptoQuant, noted an increase in bid liquidity at the $40,000 support level on Coinbase. This observation suggests that there is a strong buying interest at this level, potentially acting as a crucial support zone for Bitcoin.

BTC/USDT liquidity heatmap for Binance. Source: Material Indicators/X

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Material Indicators, a trading resource, also highlighted the presence of bid liquidity around the $42,000 mark. Whale investors seem to be showing interest in this price range, possibly aiming to prevent a further decline. This liquidity heatmap for the BTC/USDT pair on Binance, a major global exchange, depicts the levels of liquidity available.

Red Flags Surrounding Bitcoin ETF

As the market closely watches the upcoming approval decision for the first United States Bitcoin spot price exchange-traded fund (ETF), analysts are advising caution regarding overly optimistic BTC price predictions. Filbfilb, co-founder of trading suite DecenTrader, pointed out the potential risks associated with assuming the ETF’s approval will lead to a significant price surge.

“The increasing competition for who’s calling the highest number for Bitcoin when ETF comes along is a red flag,” Filbfilb wrote. He emphasized that if the initial capital flows related to the Bitcoin ETF are lackluster, a correction in price is likely to follow.

While some experts anticipate a “sell the news” response if the ETF receives the green light by January 10, 2024, Filbfilb previously forecasted a $46,000 BTC price by the April block subsidy halving. He maintains his belief in a strong overall outcome in 2024 and expects a pump in price upon ETF approval, albeit with a 95% certainty.

Q&A Section

Q: What factors have been hindering Bitcoin’s price from rallying above the current range?

A: One significant factor is profit-taking, wherein investors sell their Bitcoin to secure their profits. Additionally, high funding rates, which are the costs associated with holding long positions, have made analysts wary of a potential downturn.

Q: Why is the bid liquidity at $40,000 support level on Coinbase important for Bitcoin?

A: Bid liquidity refers to the volume of buy orders available at a specific price level. The increasing bid liquidity at the $40,000 support level suggests a strong demand for Bitcoin at that price, making it a crucial support zone.

Q: What is the significance of the Bitcoin ETF approval decision?

A: The approval of the first United States Bitcoin spot price exchange-traded fund (ETF) could have a substantial impact on Bitcoin’s price and overall market sentiment. However, analysts caution against assuming that the ETF’s approval will automatically lead to a significant price surge.

Future Outlook and Investment Recommendations

Analyzing market trends and upcoming events, it is crucial to consider both the positive and potentially negative impacts on Bitcoin’s price. While there is a possibility of a sell-off following the ETF approval, the long-term outlook remains optimistic. With the block subsidy halving on the horizon in April 2024, Bitcoin may experience a significant price surge.

Investors should carefully evaluate their risk appetite and make informed decisions based on their investment goals. It is imperative to stay updated with the latest news and expert opinions to navigate the dynamic cryptocurrency market successfully.

References

1. BTC Price Denies Bulls’ Post-Christmas Rally
2. Future NFTs Bright, Says Rari Foundation Strategy Head
3. TradingView
4. Material Indicators on X (Twitter)
5. Bitcoin Trader with $12K BTC Price Target Warns ‘Weeks’ to Crypto Comedown
6. Crypto Exchanges Seeking to Tap into Vast Indonesian Market Register as Commodity Future Exchange (CFX)
7. Ethereum 2024 Forecast: Analyst Predicts Major Surge Sparked by Catalyst

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