Bitcoin Price Battle Continues at $40K – Here’s What BTC Bulls Should Do
The price of Bitcoin (BTC) has dropped 20% since the launch of spot Bitcoin ETFs in the United States. BTC dropped to $38,000 on January 23rd. However, Bitcoin Wells bulls used the recent pullback to buy on the dip, aiming to recapture $40,000.
Data from Cointelegraph Markets Pro and TradingView showed that the price of BTC rose to $40,000 on January 25, but intraday price action suggests that maintaining the level will be challenging.
Let's take a look at what makes traders feel optimistic about a Bitcoin price recovery above $40,000.
A sell off of GBTC brings back fresh bullish sentiment
After Bitcoin ETFs turned into a “sell-the-news” phenomenon, traders lost their momentum to overcome excess pressure. This has been blamed on large outflows from Greyscale Bitcoin Trust (GBTC), which is likely a reflection of investors choosing to dive into low-fee Bitcoin ETFs.
Notably, outflows from GBTC have declined for two consecutive days, signaling reduced selling pressure from long-term investors who failed to redeem GBTC shares early.
Eric Balchunas, senior ETF analyst at Bloomberg, said that while GBTC's outflows were on a downward trend, net outflows remained at $824 million as outflows from other ETFs slowed.
Good news: GBTC is trending down. The bad news: so are the nine. That leaves us with total rolling net flows of +$824m. Also, $ARKB and $BITB crossing half a billion is impressive. A normal launch in the first month is considered a blockbuster-level success. https://t.co/jPtlxhMtwP
— Eric Balchunas (@EricBalchunas) January 25, 2024
As such, with the flow of GBTC decreasing day by day, BTC may rise above current levels.
The data on the chain shows when buying Bitcoin well dips
Amidst the ongoing market correction, data from blockchain data and intelligence firm Glassnode shows interesting activity among the Bitcoin well. These big investors actively collect more BTC despite recent market volatility.
The data highlights entities holding 1,000 BTC or more, up from 1,481 entities on Jan. 11 when spot BTC ETFs began trading to 1,533 on Jan. 25, representing a 3% increase.
This hoarding behavior from Bitcoin whales could be a sign that large parties expect the price of BTC to exceed the 2024 high of $49,000.
RELATED: Bitcoin Sees Biggest Bid Block in 3 Years as BTC Price Drops by $40K
$40,000 remains a critical level for Bitcoin
From a technical point of view, Bitcoin's Relative Strength Index (RSI) is reversing out of the oversold range. This suggests that the recent pullback may be coming to an end.
Buyers are expected to aggressively defend the $40,000 support, but should push the price above the 50-day EMA to signal a rebound. The BTC/USD pair may gain momentum after jumping above $44,700.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
